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:

Competition

The rivalry among businesses to attract customers, improve offerings, and achieve market dominance.

Unfriendly Mergers

Mergers or acquisitions that occur without the consent of the target company's management or board, often involving hostile takeover tactics.

Net Cash Flows

The difference between a company's total cash inflows and outflows over a specific period, indicating its overall liquidity movement.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.