In 2001 the federal government changed the withholding amounts for personal taxes.The change meant that people wouldn't have as much withheld from their paycheques.But there was no change in the tax code itself,so the amount of tax due in April 2002 was not changed.How would consumption and saving respond to this withholding change (note: you may assume a real interest rate of 0%)?

Question

Quizplus · Accepted Answer

The Answer of In 2001 the federal government changed the withholding amounts for personal taxes.The change meant that people wouldn't have as much withheld from their paycheques.But there was no change in the tax code itself,so the amount of tax due in April 2002 was not changed.How would consumption and saving respond to this withholding change (note: you may assume a real interest rate of 0%)?

In 2001 the Federal Government Changed the Withholding Amounts for Personal