Suppose the government increases lump-sum taxes. This causes: a. disposable income to decrease, which causes aggregate supply

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Suppose the government increases lump-sum taxes. This causes:

a. disposable income to decrease, which causes aggregate supply to decrease.

b. government spending to decrease, which causes aggregate demand to decrease.

c. disposable income to decrease, which causes consumer spending to decrease and aggregate demand to decrease.

d. consumption spending to decrease and spending on imports to increase, The effect on aggregate demand depends on whether domestic spending or spending on imports decreased the most.

Related Book For answer-question

Fundamental accounting principle

ISBN: 978-0078025587

21st edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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Posted Date: Jan 06, 2021 08:47 PM

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Suppose the government increases lump-sum taxes. This causes: a. disposable income to decrease, which causes aggregate supply

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The answer is option c In general when the government collects m... View the full answer

Fundamental accounting principle

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