If taxes rise $100 billion,disposable income will fall by $100 billion and consumption spending will also fall by $100 billion.

Question

Quizplus · Accepted Answer

The statement is too broad and cannot be universally true in all economic situations. The impact of tax increases on disposable income and consumption spending depends on a variety of factors such as the type of taxes, the income level of taxpayers, and the overall state of the economy. In some cases, tax increases may have a greater impact on one variable compared to the other or may not have a significant impact at all. Thus, it is not accurate to make a definitive statement that taxes rising will always result in a corresponding reduction in disposable income and consumption spending.

If Taxes Rise $100 Billion,disposable Income Will Fall by $100