Tax cuts shift aggregate demand
A)right as do increases in government spending.
B)right while increases in government spending shift aggregate demand left.
C)left as do increases in government spending.
D)left while increases in government spending shift aggregate demand right.

Question

Quizplus · Accepted Answer

Tax cuts shift aggregate demand to the right because they increase disposable income, leading to an increase in consumer spending, which increases overall demand in the economy. Increases in government spending also shift aggregate demand to the right, as they directly increase demand in the economy by injecting money into it.

Tax Cuts Shift Aggregate Demand