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If the US Government Lowers Personal Income Tax Rates

Question 52

Multiple Choice

If the U.S. government lowers personal income tax rates:


A) government expenditure rises, and this leads to a right shift of the IS curve.
B) government expenditure falls, and this leads to a left shift of the IS curve.
C) disposable income increases, and this leads to an increase in consumption and a right shift of the IS curve.
D) investment decreases, and this leads to a left shift in the IS curve.

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