Which of the following would likely result in a decrease in aggregate demand?
A) tax increases
B) a reduction in the real interest rate
C) increased job and future income security
D) a rise in the quantity of money in circulation

Question

Quizplus · Accepted Answer

Tax increases would lead to a decrease in disposable income for households and reduced profits for businesses, thus decreasing their ability to spend and invest, leading to a decrease in aggregate demand.

Which of the Following Would Likely Result in a Decrease