If the government gave a tax rebate to the people,but aggregate demand remained unchanged,the MOST likely reason is that:

Question

Quizplus · Accepted Answer

If aggregate demand remains unchanged despite the tax rebate, it means that people did not increase their spending or investment. The most likely reason for this is that people saved the additional money in anticipation of future tax increases, rather than spending it right away. This is also consistent with the theory of Ricardian equivalence, which suggests that people may offset the effects of tax rebates by saving more in anticipation of future tax liabilities.

If the Government Gave a Tax Rebate to the People,but