If the U.S. government increased taxes without changing spending, the U.S. AD curve would:
A)shift to the left.
B)shift to the right.
C)become flatter.
D)become steeper.

Question

Quizplus · Accepted Answer

Increasing taxes without changing government spending reduces disposable income for consumers, leading to a decrease in consumption. This decrease in consumption would cause the aggregate demand (AD) curve to shift to the left, as there is less overall demand for goods and services at any given price level.

If the US Government Increased Taxes Without Changing Spending, the U