Consider All the Effects on Fiscal Policy

question 88

Multiple Choice

Consider all the effects on fiscal policy. A cut in the tax on capital income

• A)shifts the AD curve rightward.
• B)shifts the SAS curve rightward.
• C)shifts the LAS curve rightward.
• D)all of the above
• E)only B and C

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Definitions:

Income Tax Expense

The amount of money that a company reports as an expense for paying state, federal, and foreign income taxes.

Gross Earnings

The total amount of income earned by an individual or entity before any deductions or taxes are applied.

Deductions

Amounts subtracted from gross income to reduce taxable income, including expenses, allowances, or certain types of losses.