Which statement is TRUE of the difference between a tax cut and a tax rebate?
A) A tax cut only increases the incentive to spend,while a tax rebate only increases the incentive to work.
B) A tax cut only increases the incentive to work,while a tax rebate only increases spending.
C) A tax cut increases the incentive to work and the incentive to spend,while a tax rebate only increases the incentive to spend.
D) A tax cut only increases the incentive to spend,but a tax rebate increases the incentive to work and the incentive to spend.

Question

Quizplus · Accepted Answer

A tax cut reduces the amount of tax that individuals or corporations owe, effectively increasing their disposable income, which can incentivize both work (by making the effort more financially rewarding) and spending (by providing more income to spend). A tax rebate, on the other hand, is a one-time payment that doesn't directly affect the financial rewards of working more but does immediately increase the amount of money available to spend.

Which Statement Is TRUE of the Difference Between a Tax