A tax cut _{--------------------}aggregate demand and _{--------------------} A)increases; shifts the AD curve leftward B)decreases; shifts the AD curve rightward C)decreases; shifts the AD curve leftward D)increases; shifts the AD curve rightward E)does not change; does not shift the AD curve

Question

Quizplus · Accepted Answer

A tax cut increases disposable income, leading to higher consumer spending, which increases aggregate demand and shifts the AD curve rightward.

A Tax Cut --------------------aggregate Demand and --------------------

A Tax Cut _{--------------------}aggregate Demand and _{--------------------}