The Tax Equity and Fiscal Responsibility Act of 1982 increased taxes in an effort to reduce inflationary pressure.Which of the following indicates the appropriate change in the U.S.economy?
A) Aggregate demand shifted to the left
B) Aggregate demand shifted to the right
C) The economy moved up along the aggregate demand curve
D) The economy moved down along the aggregate demand curve

Question

Quizplus · Accepted Answer

The Tax Equity and Fiscal Responsibility Act of 1982 increased taxes, which decreased disposable income for individuals and businesses. This would lead to a decrease in consumer spending and investment, causing a shift in aggregate demand to the left.

The Tax Equity and Fiscal Responsibility Act of 1982 Increased