Which of the Following Would NOT Cause a Shift in the IS

question 78

Multiple Choice

Which of the following would NOT cause a shift in the IS curve?

• A)An increase in the domestic real interest rate
• B)An increase in consumer confidence
• C)A decrease in the expected future profitability of capital
• D)A decrease in government purchases

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Definitions:

Tax Shifting

Occurs when households can alter their behavior and do something to avoid paying a tax.

Avoid Paying

Strategies or actions taken to minimize or evade expenses, taxes, or other financial obligations.

Luxury Tax

A tax imposed on expensive goods and services, often considered non-essential, as a means of raising government revenues without placing the burden on essential items.

Tax Incidence

The distribution of the economic burden of a tax between buyers and sellers, depending on the elasticity of demand and supply.