How do changes in income tax policies affect aggregate demand?

A) Higher taxes increase corporate investment and aggregate demand.
B) Higher taxes reduce disposable income, consumption, and aggregate demand.
C) Higher taxes increase aggregate supply and thus increase aggregate demand as well.
D) Higher taxes increase disposable income, consumption, and aggregate demand.

B

Economics

You might also like to view...

How does an increase in competition in an industry usually affect productivity?

What will be an ideal response?

Economics

The figure above shows the marginal revenue and costs of a perfectly competitive firm. The marginal cost of the last unit produced is

A) $4 per unit. B) $8 per unit. C) $16 per unit. D) None of the above answers is correct.

Economics