In a closed economy, if taxes fall and consumption rises, then private saving must fall.

Name: In a closed economy, if taxes fall and consumption rises, then private saving must fall.
Brand: Quizplus
Rating: 5.0 (33 reviews)

Question

Quizplus · Accepted Answer

In a closed economy, if taxes fall and consumption rises, private saving does not necessarily have to fall. It depends on how much of the tax cut is saved versus spent. If the increase in consumption is less than the decrease in taxes, private saving can still rise.

In a Closed Economy, If Taxes Fall and Consumption Rises