2421EconomicsMedium
Which of the following statements regarding taxes is correct?
AA decrease in taxes shifts the aggregate supply curve to the left
BMost economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand
CAn increase in taxes shifts the aggregate demand curve to the right
DA permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.
Correct answer
D. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.
Explanation
The correct answer is A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes..