If Households Base Their Consumption Spending on Permanent Income, Then

question 137

True/False

If households base their consumption spending on permanent income, then a temporary tax increase will cause a decrease in consumption.

---

Definitions:

Present Sale

A transaction in which the transfer of ownership of goods from the seller to the buyer occurs immediately or within a very short period following the agreement.

Subject

In various contexts, it refers to an individual or entity being discussed, analyzed, or governed.

Lease

A contractual agreement in which a property owner allows a tenant the use of the property for a specified period of time in exchange for payment.

Lessee

A person or entity who leases or rents property from a lessor, obtaining the rights to use and occupy the property according to the terms of the lease agreement.