Suppose fiscal authorities raise state income tax rates. As a result, disposable income falls, thereby
A) decreasing consumption spending, and causing the aggregate demand curve to shift to the left.
B) decreasing consumption spending, and causing a movement along a given aggregate demand curve.
C) increasing saving, and causing the aggregate demand curve to shift to the left.
D) increasing saving, and causing a movement along a given aggregate demand curve.
Correct Answer:
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