An increase in taxes will ________ consumption spending,and a decrease in transfer payments will ________ consumption spending.
A)increase; increase
B)decrease; increase
C)increase; decrease
D)decrease; decrease

Question

Quizplus · Accepted Answer

An increase in taxes reduces disposable income, leading to a decrease in consumption spending. Similarly, a decrease in transfer payments also reduces disposable income, further decreasing consumption spending.

An Increase in Taxes Will ________ Consumption Spending,and a Decrease