Suppose policy makers, as expected, cut the level of taxes. Which of the following will occur as a result of this expected tax cut?
A) An increase in stock prices.
B) No change in stock prices.
C) Stock prices decrease only if goods prices decrease.
D) A decrease in stock prices.
E) An ambiguous effect on stock prices.

Question

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The Answer of Suppose policy makers, as expected, cut the level of taxes. Which of the following will occur as a result of this expected tax cut?
A) An increase in stock prices.
B) No change in stock prices.
C) Stock prices decrease only if goods prices decrease.
D) A decrease in stock prices.
E) An ambiguous effect on stock prices.

Suppose Policy Makers, as Expected, Cut the Level of Taxes