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
B
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Johnny has been working a lot of overtime during the most current economic boom. As a result, his income is high enough for him to move from the 10 percent tax bracket to the 15 percent tax bracket. So, Johnny pays a higher percentage of a higher income to the government this year. The increased amount paid to the government is an example of:
A. discretionary fiscal policy slowing the economy. B. discretionary fiscal policy encouraging economic activity. C. automatic stabilizers slowing the economy. D. automatic stabilizers encouraging economic activity.
If a firm in a perfectly competitive industry raises its price above market price,
A. profit will increase. B. sales will drop to zero. C. demand curves will become downward sloping. D. total revenue for the firm will increase.