Tax cuts would have the same affect on the dynamic aggregate demand curve as:
A)Decreases in government purchases
B)The Federal Reserve selling U.S.treasury securities
C)The Federal Reserve buying U.S.treasury securities
D)Temporary tax increases

Question

Quizplus · Accepted Answer

Tax cuts increase disposable income, boosting consumption and shifting the aggregate demand curve to the right. Similarly, when the Federal Reserve buys U.S. treasury securities, it increases the money supply, lowers interest rates, and encourages spending, also shifting the aggregate demand curve to the right.

Tax Cuts Would Have the Same Affect on the Dynamic