If taxes go up and all else remains equal, then consumption should:
A) rise by more than the tax increase.
B) rise by the same amount as the tax increase.
C) rise by less than the tax increase.
D) fall.

Question

Quizplus · Accepted Answer

If taxes go up and all else remains equal, disposable income will decrease. As a result, consumers will have less money to spend, and consumption will fall.

If Taxes Go Up and All Else Remains Equal, Then