According to the IS-LM Model, When the Government Increases Taxes

Multiple Choice

According to the IS-LM model, when the government increases taxes and government purchases by equal amounts:

A) income, the interest rate, consumption, and investment are unchanged.
B) income and the interest rate rise, whereas consumption and investment fall.
C) income and the interest rate fall, whereas consumption and interest rise.
D) income, the interest rate, consumption, and investment all rise.