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Introduction to Economics 2
Introduction to Economics 2 Deneme Sınavı
Introduction to Economics 2 Deneme Sınavı Sorusu #350024
Introduction to Economics 2 Deneme Sınavı Sorusu #350024
Which of the following indicates the effect of an increase in taxes on aggregate expenditure function (AE) and income (Y)?
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AE shifts upward and Y decreases
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AE shifts downward and Y decreases
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AE shifts downward and Y increases
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AE shifts upward and Y increases |
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AE and Y do not change |
Yanıt Açıklaması:
An increase in taxes decreases the total spending and, therefore, shifts aggregate expenditure (AE) function downward. While other things are being equal, the downward shift in AE function lowers the income (Y).
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