Suppose a high-income person, a middle-income person, and a low-income person all purchase identical houses that are financed by similar mortgages. Who spends the most on tax-preferred goods?

Question

Quizplus · Accepted Answer

The high-income person is likely to spend more on tax-preferred goods because they have a higher income and can afford to purchase more expensive tax-preferred items. Middle-income and low-income individuals may still benefit from tax-preferred goods, but they are likely to purchase fewer of them due to budget constraints.

Suppose a High-Income Person, a Middle-Income Person, and a Low-Income