Suppose There Is a Reduction in Expected Future Taxes

question 31

Multiple Choice

Suppose there is a reduction in expected future taxes.This will cause which of the following to occur?

• A)the IS curve to shift left in the current period
• B)the IS curve to shift right in the current period
• C)the LM curve to shift up in the current period
• D)the LM curve to shift down in the current period

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Definitions:

Cytoplasm

The jelly-like substance within a cell, excluding the nucleus, containing organelles and facilitating cellular processes.

Nucleus

A membrane-bound organelle in eukaryotic cells that contains the genetic material.

Proenzyme

An inactive precursor of an enzyme, which requires a biochemical change to become active.

Active Enzyme

An enzyme in a form in which it can catalyze its specific biochemical reaction.