Author Question: Suppose individuals now believe that there will be a future tax increase. This increase in expected ... (Read 144 times)

fasfsadfdsfa · **on:** Jun 30, 2018

Suppose individuals now believe that there will be a future tax increase. This increase in expected future taxes will cause which of the following to occur in the current period?

A) the LM curve to shift down
B) the LM curve to shift up
C) the IS curve to shift rightward
D) the IS curve to shift leftward
E) none of the above

Question 2

The collapse of the subprime mortgage market

A) did not affect the corporate bond market.
B) increased the perceived riskiness of Treasury securities.
C) reduced the Baa-Aaa spread.
D) increased the Baa-Aaa spread.