Cost-benefit analysis cannot be applied to collective or public choice decision-making

In the traditional Keynesian model, an income tax cut raises real GDP because

A) consumption spending depends positively on after-tax income. B) of the crowding-out effects of taxes. C) consumption spending depends negatively on after-tax income. D) consumption spending is not related to after-tax income.

Suppose the intersection of the IS and LM curves is to the right of the FE line. An increase in the price level would most likely eliminate a disequilibrium among the asset, labor, and goods markets by

A) shifting the LM curve up and to the left. B) shifting the IS curve up and to the right. C) shifting the IS curve down and to the left. D) shifting the FE curve to the left.