The tax cut of 2001 turned out to be well-timed because it caused a
A)rightward shift of the aggregate demand curve.
B)rightward shift of the aggregate supply curve.
C)leftward shift of the aggregate demand curve.
D)leftward shift of the aggregate supply curve.

Question

Quizplus · Accepted Answer

The tax cut of 2001 reduced taxes for many Americans, which led to an increase in disposable income and consumption. This increase in consumption shifted the aggregate demand curve to the right, leading to higher output and a lower unemployment rate.

The Tax Cut of 2001 Turned Out to Be Well-Timed