If consumers believe a tax rebate is permanent,they will spend more of it.

Question

Quizplus · Accepted Answer

If consumers believe that a tax rebate is permanent, they are more likely to view it as an increase in their disposable income and therefore spend more of it. This is because they believe that they will continue to receive this extra income in the future, so they do not need to save as much of it. On the other hand, if consumers believe that the rebate is a one-time event, they may be more likely to save it or use it to pay off debt.

If Consumers Believe a Tax Rebate Is Permanent,they Will Spend