A Given Increase in Taxes Shifts the IS Curve More

question 99

Multiple Choice

A given increase in taxes shifts the IS curve more to the left the:

• A) larger the marginal propensity to consume.
• B) smaller the marginal propensity to consume.
• C) larger the government spending.
• D) smaller the government spending.

---

Definitions:

Payback Period

The length of time it takes to recover the initial investment cost through the accumulated cash flows from an investment.

Simple Rate

A term that could refer to a basic or straightforward interest rate, without compounding effects.

Revenues

The total income generated by a company from its business activities, such as sales of goods or services.

Depreciates

The process through which the value of an asset decreases over time, typically due to wear and tear or obsolescence.