Lower personal tax rates reduce
A) intended spending.
B) the equilibrium level of GDP.
C) the value of the multiplier.
D) the difference between GDP and disposable income.
E) the level of employment.

Question

Quizplus · Accepted Answer

Lower personal tax rates increase disposable income, thereby reducing the difference between GDP and disposable income. Lower taxes mean individuals have more income available after taxes, which directly impacts this difference.

Lower Personal Tax Rates Reduce