Which of the following statements is correct?
A)An increase in people's expected future income shifts the aggregate demand curve leftward.
B)A tax increase shifts the aggregate demand curve leftward.
C)An increase in potential GDP shifts the aggregate demand curve rightward.
D)An increase in exports shifts the aggregate demand curve leftward.
E)The higher the price level,the larger is the quantity of real GDP demanded.

Question

Quizplus · Accepted Answer

A tax increase reduces consumers' disposable income, leading to a decrease in consumption and shifting the aggregate demand curve leftward.

Which of the Following Statements Is Correct