If net taxes decrease,which of the following would occur?
A) Disposable income decreases,consumption at any income level increases,and the consumption-income line shifts upward.
B) Disposable income increases,consumption at any income level increases,and the consumption-income line shifts downward.
C) Disposable income increases,consumption at any income level increases,and the consumption-income line shifts upward.
D) Disposable income decreases,consumption at any income level decreases,and the consumption-income line shifts downward.
E) Disposable income increases,consumption at any income level decreases,and the consumption-income line shifts downward.

Question

Quizplus · Accepted Answer

If net taxes decrease, disposable income increases which leads to an increase in consumption at any income level. This causes the consumption-income line to shift upward, indicating that at any given level of income, consumption is higher than before.

If Net Taxes Decrease,which of the Following Would Occur