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Author Question: Since World War II, the Federal Reserve has not been involved in carrying out monetary policy. ... (Read 61 times)

vinney12

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on: Jun 29, 2018
Since World War II, the Federal Reserve has not been involved in carrying out monetary policy.
 
  Indicate whether the statement is true or false

Question 2

President Obama has discussed raising income taxes for individuals earning over 250,000 in income. Explain how these higher income taxes will affect the aggregate demand curve.
 
  What will be an ideal response?


jaygar71

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Reply #1 on: Jun 29, 2018
Answer to Question 1

FALSE

Answer to Question 2

Raising the income tax decreases the amount of disposable income available to those households. Lower disposable income decreases consumption at every price level. The result is a shift in the aggregate demand curve to the left.


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