Suppose the government decides to decrease taxes (T) permanently, the effect of this policy in the medium-run is: 1. Y does not change, C and S increases. 2. Y does not change, C and S decreases. 3. Y does not change, C decreases and S increases. 4. Y. C and S does not change.

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Chapter1: Making Economics Decisions
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Suppose the government decides to decrease taxes (T) permanently, the effect of this

policy in the medium-run is: 1. Y does not change, C and S increases.

2. Y does not change, C and S decreases.

3. Y does not change, C decreases and S increases.

4. Y. C and S does not change.

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