Which of the following policy examples does NOT reduce the domestic absorption?
A) Collect higher taxes on luxurious goods.
B) Raise interest rates on loans.
C) Give income tax rebates to households.
D) Cut government employees pension payments.

Question

Quizplus · Accepted Answer

Giving income tax rebates to households would increase their disposable income, leading to increased consumption and higher domestic absorption. The other options - collecting higher taxes on luxurious goods, raising interest rates on loans, and cutting government employees' pension payments - would either directly or indirectly reduce domestic absorption.

Which of the Following Policy Examples Does NOT Reduce the Domestic