A Decrease in the Effective Tax Rate on Capital Would

question 91

Multiple Choice

A decrease in the effective tax rate on capital would shift the IS curve ________ and the LM curve ________.

• A)down;is unchanged
• B)down;left
• C)up;is unchanged
• D)up;left

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Definitions:

Legal-Rational Authority

Authority based in laws, rules, and procedures, not in the heredity or personality of any individual leader.

Bureaucracy

A type of secondary group designed to perform tasks efficiently, characterized by specialization, technical competence, hierarchy, written rules, impersonality, and formal written communication.

Specialization

The process of focusing on a narrow area of knowledge or skill, often leading to increased efficiency and expertise in that area.

Impersonality

A term describing situations or behaviors that lack personal feelings or emotions, often found in formal organizations or bureaucracies to ensure objectivity.