Multiple Choice
Which of the following describes the effects of a decrease in net taxes?
A) A decrease in net taxes raises aggregate expenditure by raising disposable income, thereby increasing consumption.
B) A decrease in net taxes raises aggregate expenditure by raising disposable income, thereby decreasing consumption.
C) A decrease in net taxes lowers aggregate expenditure by lowering disposable income, thereby decreasing consumption.
D) It lowers aggregate expenditure by lowering disposable income, thereby increasing consumption.
Correct Answer:
Verified
Correct Answer:
Verified
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