We know with certainty that a decrease in tax must cause which of the following?
A) A decrease in output if the central bank simultaneously pursues a contractionary monetary policy.
B) An increase in the interest rate and an increase in investment.
C) An increase in the interest rate and a decrease in investment.
D) An increase in the interest rate and an upward shift in the LM curve.
E) An increase in the interest rate and an ambiguous effect on investment.
Correct Answer:
Verified
Q1: An increase in the money supply must
Q2: Which of the following will cause a
Q4: Suppose there is a simultaneous tax increase
Q5: An increase in the reserve deposit ratio,
Q6: Assume that investment spending depends only on
Q7: Suppose there is a decrease in consumer
Q8: An increase in the budget deficit decreasing
Q9: Suppose the economy is currently operating on
Q10: Suppose there is a simultaneous RBA sale
Q11: A decrease in the aggregate price level,
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