Question

g An increase in taxes when the economy is above full employment ​ ______ aggregate demand and real​ GDP, and the price level​ ______.

Answer 1

C. ​decreases; falls

Step-by-step explanation:

As we know that

The rise in taxes results in low disposable income for individuals that lowered the spending of the consumer also the consumer spending is an element of the aggregate demand so ultimately it declines that result the curve to shift leftward or downward

Due to this, the real GDP also falls, and the price level too

Hence, the correct option is c.