Other things equal, a reduction in income taxes would
A)reduce productivity and reduce aggregate supply.
B)increase consumption and increase aggregate demand.
C)increase the supply of money and reduce investment.
D)increase government spending and increase aggregate demanD.

Question

Quizplus · Accepted Answer

A reduction in income taxes would increase disposable income, leading to increased consumption and aggregate demand.

Other Things Equal, a Reduction in Income Taxes Would