Which of the Following Will Occur in an IS-LM Model

question 13

Multiple Choice

Which of the following will occur in an IS-LM model, if the government decides to raise the income tax rate?

• A)the IS-curve will become flatter and shift to the right
• B)the IS-curve will become steeper and shift to the left
• C)the IS-curve will shift parallel to the left
• D)the LM-curve will become steeper and shift to the right
• E)the LM-curve will shift parallel to the right

---

Definitions:

Manufacturing Overhead Budget

A detailed plan showing the production costs, other than direct materials and direct labor, that will be incurred over a specified time period.

Variable Selling

Refers to costs that vary directly with the level of sales, such as commissions and shipping charges.

Administrative Expense Budget

A projection of the costs associated with the general administration and management of a business.

Variable Cost

Costs that change in proportion to the level of production activity or business operations.