Personal income taxes are reduced as part of an expansionary fiscal policy.What is the impact on aggregate expenditures and income?

Question

Quizplus · Accepted Answer

When personal income taxes are reduced as part of an expansionary fiscal policy, individuals have more disposable income, which can lead to an increase in consumption spending. This increase in consumption spending can then lead to an increase in aggregate expenditures and ultimately an increase in income. Therefore, both aggregate expenditures and income increase.

Personal Income Taxes Are Reduced as Part of an Expansionary