In the aggregate expenditures model, a reduction in taxes may:
A)increase saving.
B)increase real GDP.
C)reduce unemployment.
D)do all of the above.

Name: In the aggregate expenditures model, a reduction in taxes may: A)increase saving. B)increase real GDP. C)reduce unemployment. D)do all of the above.
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Question

Quizplus · Accepted Answer

A reduction in taxes increases disposable income, which can lead to increased spending and investment. This can increase real GDP and reduce unemployment.

In the Aggregate Expenditures Model, a Reduction in Taxes May