A decline in taxes ________ consumer expenditure and shifts the ________ curve to the ________, everything else held constant.
A) raises; MP; right
B) lowers; IS; left
C) raises; IS; right
D) lowers; MP; left

Question

Quizplus · Accepted Answer

A decline in taxes increases disposable income, leading to an increase in consumer expenditure. This, in turn, shifts the IS (Investment-Saving) curve to the right, reflecting an increase in overall demand in the goods and services market at each interest rate.

A Decline in Taxes ________ Consumer Expenditure and Shifts the ________

A Decline in Taxes Consumer Expenditure and Shifts the