As a result of _____,a temporary tax rebate tends to create a small increase in spending over many years rather than a big increase in the present.
A) crowding out
B) intertemporal substitution
C) consumption smoothing
D) the bandwagon effect

Question

Quizplus · Accepted Answer

Consumption smoothing refers to the tendency for individuals to spread out their spending over time, rather than making large, sudden purchases. Therefore, a temporary tax rebate may not result in a significant increase in spending in the present, as individuals may choose to save or invest the money, or spread out its use over time.

As a Result of _____,A Temporary Tax Rebate Tends to Create