Suppose the government raises income taxes, so consumers have less disposable income. This policy action will cause a(n)

Name: Suppose the government raises income taxes, so consumers have less disposable income. This policy action will cause a(n)
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Question

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When the government raises income taxes, consumers have less disposable income to spend, which decreases consumer spending. This reduction in consumer spending will lead to a decrease in aggregate demand, as less money is being spent in the economy.

Suppose the Government Raises Income Taxes, So Consumers Have Less