Answer to Question #220685 in Macroeconomics for Shreya

Question #220685
Increase ih the tax rate causes shift in the position of the is curve dicuss with agruement
1
Expert's answer
2021-07-27T18:27:02-0400

An increase in taxes shifts the IS curve to the left. When taxes increase, the rate of consumption goes down leading to a decrease in output/ income. There will also be a decrease in interest rates and aggregate output.


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