A tax cut ________ aggregate demand and ________.
A)decreases;shifts the AD curve rightward
B)increases;shifts the AD curve leftward
C)increases;shifts the AD curve rightward
D)decreases;shifts the AD curve leftward
E)does not change;does not shift the AD curve

Question

Quizplus · Accepted Answer

A tax cut puts more money in consumers' pockets, which increases their disposable income and therefore their ability to spend. This leads to an increase in consumption spending, which is a component of aggregate demand. As a result, the AD curve shifts rightward.

A Tax Cut ________ Aggregate Demand and ________

A Tax Cut Aggregate Demand and