An Anticipated Fiscal Policy in the Form of a Tax

Multiple Choice

An anticipated fiscal policy in the form of a tax hike

A) increases labour supply and full-employment level of output in the Classical model.
B) increases full-employment level of output through higher aggregate demand in the Keynesian model.
C) increases leisure and decreases labour supply and output in the Classical model.
D) has the same effect in the Keynesian and Classical models.