If tax policies become less favorable,then
A)The AD curve will not be affected.
B)There will be a movement to the right along the AD curve.
C)The AD curve will shift to the left.
D)The AD curve will shift to the right.

Question

Quizplus · Accepted Answer

If tax policies become less favorable, it means that taxes will increase, which will reduce disposable income and decrease consumption. As a result, there will be a decrease in aggregate demand, shifting the AD curve to the left.

If Tax Policies Become Less Favorable,then