Question

 If the income of everyone in the city went up because the city massively cut taxes for citizens, the overall population of people just had more income. How would this factor impact demand? Would overall demand increase or decrease? (Political economics)

Answer 1

Answer: Demand would increase

Step-by-step explanation:

When there is a reduction in tax, it simply means that the purchasing power of individuals will increase as they'll have more money with them.

In such case, when there's an increase in income, there'll be a corresponding increase in the demand for goods and services as people will have more funds to buy what they want.