Tax rebates are likely to have a larger impact on consumer spending if the tax cuts are permanent rather than temporary.

Question

Quizplus · Accepted Answer

Permanent tax cuts provide consumers with more certainty about their future income, making it more likely that they will increase their spending in response to a tax rebate. In contrast, temporary tax cuts may lead consumers to save the rebate, as they may fear that their income will decrease once the tax cut expires.

Tax Rebates Are Likely to Have a Larger Impact on Consumer