A tax rebate will be effective in stimulating aggregate demand if funds from the rebate are saved.

Name: A tax rebate will be effective in stimulating aggregate demand if funds from the rebate are saved.
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Question

Quizplus · Accepted Answer

A tax rebate is intended to encourage spending and stimulate aggregate demand. If individuals save the funds instead of spending them, then there is no immediate impact on demand. However, if individuals use the rebate to pay off debt or invest, it may have a positive long-term effect on the economy.

A Tax Rebate Will Be Effective in Stimulating Aggregate Demand