Question

If the government increases personal income taxes, how does it affect the circular-

flow model?

a. Corporations have less to spend on products for store shelves

b. The government has less to
spend on military supplies

c. Less people will have jobs

d. People will have less to spend in the product market

PLEASE HELP QUICKLY

Answer 1

D. People will have less to spend in the product market

Step-by-step explanation:

Personal income taxes and the circular-flow model:

Personal income taxes have an impact on the consumption element of total demand. Increased income taxes lower disposable personal income, which in turn can affect spending and consumption. Income tax cuts can help raise disposable personal income, increase consumption, and increase aggregate demand.