The U.S.experience with tax cuts and tax increases since 1975 suggests that
A)tax cuts always stimulate consumption spending.
B)tax changes have a stable and predictable effect on consumption spending.
C)temporary tax changes are less effective than permanent changes.
D)tax changes have no effect on consumption spending.

Question

Quizplus · Accepted Answer

The U.S. experience with tax cuts and tax increases since 1975 suggests that temporary tax changes are less effective than permanent changes. This means that the impact of tax changes on consumption spending is not stable or predictable and that tax cuts may not always stimulate consumption spending. Therefore, choice C is the most accurate.

The USExperience with Tax Cuts and Tax Increases Since 1975 Suggests