Temporary tax cuts will have a greater influence on consumption expenditures than temporary tax cuts.

Question

Quizplus · Accepted Answer

The statement is incorrect. Temporary tax cuts are likely to have a smaller influence on consumption expenditures compared to permanent tax cuts, as people are more likely to adjust their long-term spending habits in response to permanent changes in their income. Temporary tax cuts may lead to a temporary increase in spending, but the effect may not last as long as with permanent tax cuts.

Temporary Tax Cuts Will Have a Greater Influence on Consumption