FIGURE 22-4 -Refer to Figure 22-4.The rotation from AE₀ to AE₁ could be caused by A)a higher net tax rate. B)a lower net tax rate. C)a balanced budget. D)lower government purchases. E)higher government purchases.

Question

Quizplus · Accepted Answer

A lower net tax rate increases disposable income, leading to higher consumption and aggregate expenditure, causing the AE curve to shift from AE₀ to AE₁.

FIGURE 22-4 -Refer to Figure 22-4.The Rotation from AE0 to AE1 Could

FIGURE 22-4 -Refer to Figure 22-4.The Rotation from AE₀ to AE₁ Could