An Increase in Taxes Shifts the IS Curve, Drawn with Income

question 16

Multiple Choice

An increase in taxes shifts the IS curve, drawn with income along the horizontal axis and the interest rate along the vertical axis:

• A) downward and to the left.
• B) upward and to the right.
• C) upward and to the left.
• D) downward and to the right.

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Definitions:

UCS

Unconditioned Stimulus, an aspect of classical conditioning theory, referring to a stimulus that naturally triggers a reflexive or involuntary response without prior learning.

CS

Stands for Conditioned Stimulus in classical conditioning; a neutral stimulus that, after being repeatedly paired with an unconditioned stimulus, becomes able to elicit a conditioned response.

CR

Conditional Reflex; a learned response to a specified stimulus.

Social Learning Theory

A theory that posits individuals learn behaviors by observing and imitating others, influenced by punishments and rewards.