When Taxes on the Return to Capital in a Given

Multiple Choice

When taxes on the return to capital in a given economy are reduced,it causes firms to employ __________ capital goods.In terms of the production function (graphed with labor on the horizontal axis and Real GDP on the vertical axis) ,this then causes ____________________ which makes the LRAS curve shift ____________ resulting in ______________________.

A) less; the production function to shift downward; leftward; a shrinking economy
B) more; the production function to shift upward; rightward; economic growth
C) more; a movement up along a given production function; rightward; economic growth
D) more; a movement down along a given production function; leftward; a shrinking economy