If net taxes are cut,consumer
A) spending is not affected
B) spending increases by the amount of the tax cut
C) spending increases by an amount less than the full amount of the tax cut
D) saving increases by the full amount of the tax cut
E) spending increases by two-thirds of the amount of the tax cut and consumer saving increases by one-third of the amount of the tax cut

Question

Quizplus · Accepted Answer

When net taxes are cut, consumers have more disposable income, which typically leads to an increase in spending. However, consumers often save a portion of the additional income, so spending increases by an amount less than the full amount of the tax cut.

If Net Taxes Are Cut,consumer