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the federal government announced significant tax cuts, enabling people to keep a greater portion of their income. what will happen to the demand curve

2 Answers

6 votes

It will shift the demand curve to the right meaning that more people will buy things.

User Pavel Safronov
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3 votes

Answer:

The demand curve will move to the right

Step-by-step explanation:

Tax cuts: This is the reduction of tax been levied on income of individuals or firms. this enables workers/employees to have increased take home pay.this kind of policy can be initiated and implemented by the government and and not by employers of labor

The increase in take home pay will definitely lead to increase in quantity of goods or services been demanded ( D1 to D2 ) in the open market which will invariably drive prices higher ( P1 to P2 ), while the supply curve will remain the same the demand curve will shift to the right. businesses tend to flourish in times of tax cut because the increase in demand means profit maximization for business.

the federal government announced significant tax cuts, enabling people to keep a greater-example-1
User Walshy
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