A change in tax rates ________ affect individual's behavior regarding consumption and saving if the change is permanent.
A) is likely to
B) will definitely
C) will negatively
D) will not

Question

Quizplus · Accepted Answer

A change in tax rates is likely to affect individual's behavior regarding consumption and saving if the change is permanent. This is because individuals will adjust their spending and saving patterns in response to the change in taxation. For example, if taxes are increased, individuals may choose to save more and spend less in order to maintain their level of disposable income. On the other hand, if taxes are reduced, individuals may choose to spend more and save less. Therefore, a permanent change in tax rates is likely to have an impact on individual behavior.

A Change in Tax Rates ________ Affect Individual's Behavior Regarding