Question

A cut in direct taxes on households' income

Select one:
O a. Has no effect
& b. Shifts the aggregate demand curve to the left
c. Moves the economy along the aggregate demand curve
O d. Shifts the aggregate demand curve to the right​

Answer 1

d. Shifts the aggregate demand curve to the right​

Step-by-step explanation:

A cut in tax on household's income increase the aggregate demand and therefore shifts the aggregate demand curve to the right. When taxes are decreased, income available for making purchases increases, thus, increasing the consumption in the economy.