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If taxpayers were given a tax rebate, what impact would this have on the aggregate demand curve?

User Asiop
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1 Answer

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Step-by-step explanation:

An increase in income taxes reduces disposable personal income and thus reduces consumption (but by less than the change in disposable personal income). That shifts the aggregate demand curve leftward by an amount equal to the initial change in consumption that the change in income taxes produces times the multiplier.

User Kankaristo
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