How Does a Tax Cut Affect the Expenditure Schedule

question 59

Multiple Choice

How does a tax cut affect the expenditure schedule?

• A)It causes movement to the left along the schedule.
• B)It causes the schedule to shift upward.
• C)It causes movement to the right along the schedule.
• D)It causes the schedule to shift downward.

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Definitions:

Administrative Agency

Any government body created by the legislative branch (e.g., Congress, a state legislature, or a city council) to carry out specific duties.

Anticompetitive Conduct

Actions by businesses that harm competition, including monopolization, illegal mergers, and unfair trade practices.

Interstate Commerce Commission

A regulatory agency in the United States established in 1887 to regulate railroad prices and later expanded to oversee other modes of transportation.

Formal Rule Making

A type of rule-making that is used when legislation requires a formal hearing process with a complete transcript; consists of publication of the proposed rule in the Federal Register, a public hearing, publication of formal findings, and publication of the final rule if adopted.