____ income taxes and payroll taxes _____ after-tax incomes, which _____ consumption and therefore reduces aggregate expenditure.Group of answer choicesLower; raise; decreasesLower; lower; increasesHigher; raise; increasesHigher; lower; decreases
Question
____ income taxes and payroll taxes _____ after-tax incomes, which _____ consumption and therefore reduces aggregate expenditure.Group of answer choicesLower; raise; decreasesLower; lower; increasesHigher; raise; increasesHigher; lower; decreases
Solution
Income taxes and payroll taxes have an impact on after-tax incomes. Specifically, when these taxes are lower, they raise after-tax incomes. This increase in after-tax incomes leads to higher consumption, which in turn increases aggregate expenditure. Therefore, the correct answer is: Lower; raise; increases.
Similar Questions
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