How does a change in taxes primarily affect aggregate demand?
a. A tax change alters exports and net exports
b. A tax change alters investment by an equal and opposite amount.
c. A tax change alters disposable income and consumption spending.
d. A tax change alters government purchases by an equal amount.
c
You might also like to view...
Which of the following provides the strongest evidence that the corporate form of business structure is relatively efficient, particularly when business firms are large?
a. the fact that almost 90 percent of business revenues are generated by corporations b. the fact that individual proprietorships are more numerous than corporations c. the fact that economic theory indicates corporate managers have some leeway to pursue their own interests at the expense of the owners of the firm d. the high salaries of many corporate executives, including some managing firms that are making economic losses
According to the benefits principle, it is fair for people to pay taxes based on their ability to shoulder the tax burden
a. True b. False Indicate whether the statement is true or false