-The above data suggest that:
A) a policy of tax reduction will increase consumption.
B) a policy of tax increases will increase consumption.
C) tax changes will have no impact on consumption.
D) after-tax income should be lowered to increase consumption.

Question

-The above data suggest that:
A) a policy of tax reduction will increase consumption. 
B) a policy of tax increases will increase consumption. 
C) tax changes will have no impact on consumption. 
D) after-tax income should be lowered to increase consumption.

Quizplus · Accepted Answer

A policy of tax reduction increases disposable income, which typically leads to an increase in consumption as people have more money to spend.

-The Above Data Suggest That