We Know with Certainty That a Decrease in Tax Must

Multiple Choice

We know with certainty that a decrease in tax must cause which of the following?

A) A decrease in output if the central bank simultaneously pursues a contractionary monetary policy.
B) An increase in the interest rate and an increase in investment.
C) An increase in the interest rate and a decrease in investment.
D) An increase in the interest rate and an upward shift in the LM curve.
E) An increase in the interest rate and an ambiguous effect on investment.