Consumer spending will likely rise if:
A) government transfers rise.
B) the government raises tax rates.
C) government transfers fall.
D) the government raises tax rates or government transfers fall.

Question

Quizplus · Accepted Answer

Government transfers, such as stimulus checks or unemployment benefits, put extra money in consumers' pockets, increasing their ability to spend. Therefore, if government transfers rise, consumer spending is likely to rise as well. The other choices suggest that government actions would decrease consumers' disposable income, reducing their spending power.

Consumer Spending Will Likely Rise If