Which of the Following Will Occur If There Is a Decrease

question 28

Multiple Choice

Which of the following will occur if there is a decrease in taxes?

• A) Neither the IS nor the LM curve shifts.
• B) The IS curve shifts and the economy moves along the LM curve.
• C) Both the IS and LM curves shift.
• D) Output will change causing a change in money demand and a shift of the LM curve.
• E) The LM curve shifts and the economy moves along the IS curve.

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Definitions:

Net Operating Income

The profit generated from a company's everyday business operations, excluding expenses from interest and taxes.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from gross profit.

Direct Labor Cost

The total cost of labor directly involved in the production of goods, including wages and benefits for the workers on the production line.

Variable Costing

An accounting technique that considers only variable costs - those that vary with production levels - when calculating the cost of producing goods.