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Other Things Constant,a Reduction in Marginal Tax Rates Will Tend

Question 159

Multiple Choice

Other things constant,a reduction in marginal tax rates will tend to increase aggregate supply because the lower taxes will increase


A) disposable income,which will induce an increase in consumption and aggregate supply.
B) business optimism,which will increase both investment and aggregate supply.
C) savings,which will lead to lower interest rates,an increase in consumption,and an increase in aggregate supply.
D) the attractiveness of productive activity relative to leisure and tax avoidance.

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