During recessions, what do taxes tend to do, and to what effect?
A)They rise and so shift aggregate demand right.
B)They rise and so shift aggregate demand right
C)They fall and so shift aggregate demand right.
D)They fall and so shift aggregate demand right

Question

Quizplus · Accepted Answer

During recessions, governments often reduce taxes to stimulate the economy, which shifts aggregate demand to the right by increasing consumers' disposable income and encouraging spending.

During Recessions, What Do Taxes Tend to Do, and to What