When taxes decrease,consumption
A)increases as shown by a movement to the right along a given aggregate demand curve.
B)increases, shifting aggregate demand to the right.
C)decreases, shifting aggregate supply to the right.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When taxes decrease, consumers have more disposable income, which typically leads to an increase in consumption. This increase in consumption shifts the aggregate demand curve to the right.

When Taxes Decrease,consumption