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Question 83

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Exhibit: IS-LM Fiscal Policy Use the following to answer questions : Exhibit: IS-LM Fiscal Policy -(Exhibit: IS-LM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r<sub>1</sub> and income Y<sub>1</sub>, a tax cut would generate the new equilibrium combination of interest rate and income: A) r<sub>2</sub>, Y<sub>2</sub> B) r<sub>3</sub>, Y<sub>2</sub> C) r<sub>2</sub>, Y<sub>3</sub> D) r<sub>3</sub>, Y<sub>3</sub>
-(Exhibit: IS-LM Fiscal Policy) Based on the graph, starting from equilibrium at interest rate r1 and income Y1, a tax cut would generate the new equilibrium combination of interest rate and income:


A) r2, Y2
B) r3, Y2
C) r2, Y3
D) r3, Y3

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