Figure 6.2

-Refer to Figure 6.2.Holding other variables constant,an increase in income taxes will result in a

Name: Figure 6.2 - Refer to Figure 6.2. Holding other variables constant,an increase in income taxes will result in a
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Question

Figure 6.2 -Refer to Figure 6.2.Holding other variables constant,an increase in income taxes will result in a

Quizplus · Accepted Answer

An increase in income taxes will result in a decrease in disposable income (income after taxes) and thus a decrease in consumption. This will cause a shift from curve S₂ (higher consumption) to curve S₁ (lower consumption).

Figure 6.2 -Refer to Figure 6.2.Holding Other Variables Constant,an Increase in Income