Everything else held constant,an increase in net taxes will cause the IS curve to shift to the ________ and aggregate demand will ________.
A)right;increase
B)right;decrease
C)left;increase
D)left;decrease

Question

Quizplus · Accepted Answer

An increase in net taxes will reduce disposable income, which will reduce consumption and aggregate demand. This leads to a leftward shift in the IS curve.

Everything Else Held Constant,an Increase in Net Taxes Will Cause