If the government cuts taxes,total spending will fall and AD will shift to the left.

Name: If the government cuts taxes,total spending will fall and AD will shift to the left.
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Question

Quizplus · Accepted Answer

If the government cuts taxes, it leaves more disposable income in the hands of consumers, which can lead to an increase in consumption and therefore an increase in aggregate demand. This can lead to a shift in the AD curve to the right, not the left.

If the Government Cuts Taxes,total Spending Will Fall and AD