Which of the following would cause the AD curve to shift to the left?
A)An increase in tax rates
B)An increase in military purchases
C)An increase in unemployment compensation
D)A decrease in sales taxes
E)A decrease in potential GDP

Question

Quizplus · Accepted Answer

An increase in tax rates reduces consumers' disposable income, leading to a decrease in consumption and shifting the aggregate demand curve to the left.

Which of the Following Would Cause the AD Curve to Shift