Which fiscal stimulus policy will provide a greater incentive to work?
A) a tax rebate program
B) an income tax rate cut
C) an income tax increase
D) a bond purchase program

Question

Quizplus · Accepted Answer

An income tax rate cut would provide a greater incentive to work because it directly affects individuals' take-home pay. With a lower tax rate, individuals will have more money to keep and can thus be motivated to work more or take on additional work to increase their income. A tax rebate program may provide a one-time boost to spending but does not provide a continuous incentive to work. An income tax increase would have the opposite effect and discourage individuals from working or taking on additional work. A bond purchase program does not provide any direct incentive to work.

Which Fiscal Stimulus Policy Will Provide a Greater Incentive to Work