Answer to Question #8982 in Macroeconomics 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?
1
Expert's answer
2012-05-09T09:04:21-0400
An increase in income taxes reduces aggregate expenditure at each income level
and shifts the AE curve down (by 10 points).

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