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Suppose the government is planning an increase in the income tax 16 a).docx

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Suppose the government is planning an increase in the income tax 16 a) Explain how and why this will affect the Aggregate Demand and/or the Aggregate Supply. 16b) Explain how and why this tax increase will affect household consumption and saving. Explain how and why thit will affect the Aggregate Demand (AD) and/or the Aggregute supely (ALin? The diagram is provided below for your reference. .

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Suppose the government is planning an increase in the income tax 16 a) Explain how and why this will affect the Aggregate Demand and/or the Aggregate Supply. 16b) Explain how and why this tax increase will affect household consumption and saving. Explain how and why thit will affect the Aggregate Demand (AD) and/or the Aggregute supely (ALin? The diagram is provided below for your reference.

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  • 1. Suppose the government is planning an increase in the income tax 16 a) Explain how and why this will affect the Aggregate Demand and/or the Aggregate Supply. 16b) Explain how and why this tax increase will affect household consumption and saving. Explain how and why thit will affect the Aggregate Demand (AD) and/or the Aggregute supely (ALin? The diagram is provided below for your reference.