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Suppose Fiscal Authorities Raise State Income Tax Rates

Question 80

Multiple Choice

Suppose fiscal authorities raise state income tax rates.As a result, disposable income falls, thereby ____, and causing __________


A) decreasing consumption spending; the aggregate demand curve to shift to the left.
B) decreasing consumption spending; a movement along a given aggregate demand curve.
C) increasing saving; the aggregate demand curve to shift to the left.
D) increasing saving; a movement along a given aggregate demand curve.

Correct Answer:

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