When the Harper government decreases the level of taxes in the economy,this has the effect of
A)increasing AD.
B)decreasing AD.
C)increasing AS in the long run.
D)decreasing AS in the long run.

Question

Quizplus · Accepted Answer

When the government decreases taxes, it leaves consumers with more money to spend. This leads to an increase in aggregate demand (AD) as people increase their consumption and investment, leading to an increase in economic activity.

When the Harper Government Decreases the Level of Taxes in the Economy,this