# Answer on Macroeconomics Question for moni

Question #8982

consumption function C=2+0.7(Y-T). If taxes increase by $10, what would happen to the aggregate expenditure line?

Expert's answer

An increase in income taxes reduces aggregate expenditure at each income level

and shifts the AE curve down (by 10 points).

and shifts the AE curve down (by 10 points).

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