Which of the following statements regarding taxes is correct ?

A. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

B. A decrease in taxes shifts the aggregate supply curve to the left

C. An increase in taxes shifts the aggregate demand curve to the right

D. Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

Found an error? Read our corrections policy and submit a sourced correction below. You can also share a useful explanation in your own words.

Discuss the answer or suggest a sourced correction
Thank you for contributing.
Your comment was submitted and will appear after editorial review.

Your email is used only for moderation and is never displayed. Spam, copied material and fabricated endorsements are rejected.