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Consider All the Effects of Fiscal Policy

Question 30

Multiple Choice

Consider all the effects of fiscal policy. A cut in the income tax


A) shifts the AD curve rightward but does not shift either the LAS or SAS curve.
B) shifts the AD, SAS, and LAS curves rightward.
C) shifts the SAS curve rightward but does not shift either the AD or LAS curve.
D) shifts both the SAS and LAS curves rightward but does not shift the AD curve.
E) shifts the LAS curve rightward but does not shift either the AD or SAS curve.

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