The IS curve shifts to the right where there is
A)an increase in current taxes.
B)a reduction in expected future taxes.
C)a reduction in expected future output.
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

A reduction in expected future taxes increases consumer and business optimism, leading to increased spending and investment, which shifts the IS curve to the right.

The IS Curve Shifts to the Right Where There Is