In 2009 Congress passed legislation providing states with funds to build roads and bridges.It also instituted tax cuts.Which of these shifts aggregate demand right?
A)only the increased funding for states
B)only the tax cuts
C)both the increased funding for states and the tax cuts
D)neither the increased funding for states nor the tax cuts

Question

Quizplus · Accepted Answer

Both the increased funding for states and the tax cuts would shift aggregate demand right. The increased funding for states would lead to an increase in government spending, which is a component of aggregate demand, while the tax cuts would increase disposable income, leading to an increase in consumption, which is also a component of aggregate demand.

In 2009 Congress Passed Legislation Providing States with Funds to Build