As a result of people's habit formation, a tax cut that aims at increasing desired real consumption spending will

Name: As a result of people's habit formation, a tax cut that aims at increasing desired real consumption spending will
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Question

Quizplus · Accepted Answer

Tax cuts increase disposable income, leading to higher consumption spending. This increase in consumption contributes to a rise in aggregate demand, which can have long-lasting effects on the economy by potentially stimulating growth and reducing unemployment.

As a Result of People's Habit Formation, a Tax Cut