When taxes increase,consumption
A)decreases as shown by a movement to the left along a given aggregate-demand curve.
B)decreases as shown by a shift of the aggregate demand curve to the left.
C)increases as shown by a movement to the right along a given aggregate-demand curve.
D)increases as shown by a shift of the aggregate demand curve to the right.

Question

Quizplus · Accepted Answer

When taxes increase, consumers have less disposable income, leading to a decrease in consumption. This results in a leftward shift of the aggregate demand curve, as overall demand in the economy decreases.

When Taxes Increase,consumption