Suppose the government decreases lump-sum taxes.This causes
A) disposable income to increase,which causes consumption spending to increase and aggregate demand to increase.
B) government spending to increase,which causes aggregate demand to increase.
C) consumption spending to decrease and spending on imports to increase.The effect on aggregate demand depends on whether domestic spending or spending on imports decreased the most.
D) disposable income to increase,which causes aggregate supply to increase.
Correct Answer:
Verified
Q33: Suppose the government increases lump-sum taxes. This
Q49: If the government increases spending but doesn't
Q50: If the economy is experiencing a recessionary
Q51: If the economy is at an output
Q52: "Expansionary fiscal policy is always 100 percent
Q53: To reduce an expansionary gap,the government could
A)decrease
Q55: Three candidates for political office disagree over
Q56: If the government began providing free textbooks
Q57: Figure 11-1 Q58: If the economy is at an output
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents