Question

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.

Answer 1

c.both the increased funding for states and the tax cuts

the tax cuts will put more money into people pocket and thus more buying power increasing demand. the state government increased expenditure in public projects will increase money circulating in the economy and hence increased purchasing power.