What effect will a reduction in personal income taxes,other things being equal,have?
A)It will decrease aggregate demand.
B)It will leave consumers with more disposable income.
C)It will leave consumers with less disposable income.
D)It will increase aggregate supply.

Question

Quizplus · Accepted Answer

Reduction in personal income taxes will leave consumers with more disposable income, which will increase their purchasing power and result in an increase in consumption expenditure. This will, in turn, increase aggregate demand in the economy.

What Effect Will a Reduction in Personal Income Taxes,other Things