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:

Interest Expense

The cost incurred by an entity for borrowed funds, typically stated as an annual rate.

Net Debt

A financial metric that calculates a company's total debt minus its cash and cash equivalents, assessing its leverage.

Equity Holders

Investors who own shares of stock in a company, giving them a claim on the company's assets and earnings.

ROE

Return on Equity, a measure of a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.