Consumption will generally decrease when the income tax rate ________ or transfer payments ________.

Name: Consumption will generally decrease when the income tax rate ________ or transfer payments ________.
Brand: Quizplus
Rating: 4.7 (42 reviews)

Question

Quizplus · Accepted Answer

Consumption typically decreases when the income tax rate increases because individuals have less disposable income to spend. Similarly, when transfer payments (such as social security, unemployment benefits) decrease, individuals also have less income, leading to a decrease in consumption.

Consumption Will Generally Decrease When the Income Tax Rate ________