Which of the following will cause a rightward shift of the IS curve?
A) A decrease in expected future output.
B) An increase in current taxes.
C) An increase in expected future real interest rates.
D) A decrease in expected future taxes.
E) A decrease in government spending.

Question

Quizplus · Accepted Answer

A decrease in expected future taxes encourages consumers to spend more now, anticipating lower taxes ahead. This increases aggregate demand, shifting the IS curve to the right.

Which of the Following Will Cause a Rightward Shift of the IS