All Else Constant, a Decrease in the Income Tax Rate

question 134

Multiple Choice

All else constant, a decrease in the income tax rate will result in

• A)a movement down along the aggregate expenditure curve.
• B)an upward shift of the AE curve with no change in its slope.
• C)a downward shift of the AE curve with no change in its slope.
• D)a decrease in the consumption expenditure.
• E)an AE curve with a steeper slope.

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Definitions:

Cost of Goods Sold

The direct costs associated with producing goods sold by a company, including materials and labor costs.

Sales

The exchange of goods or services for money; the revenue generated from such transactions.

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company.