A tax increase ________ disposable income,________ consumption expenditure,and shifts the IS curve to the ________,everything else held constant.

Name: A tax increase ________ disposable income,________ consumption expenditure,and shifts the IS curve to the ________,everything else held constant.
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Question

Quizplus · Accepted Answer

A tax increase reduces disposable income, which in turn decreases consumption expenditure. This leads to a leftward shift of the IS curve, reflecting a decrease in overall demand at any given interest rate.

A Tax Increase ________ Disposable Income,________ Consumption Expenditure,and Shifts the IS

A Tax Increase Disposable Income, Consumption Expenditure,and Shifts the IS