An Increase in Taxes Will ________ Consumption Spending,and a Decrease

question 178

Multiple Choice

An increase in taxes will ________ consumption spending,and a decrease in transfer payments will ________ consumption spending.

• A)increase; increase
• B)decrease; increase
• C)increase; decrease
• D)decrease; decrease

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Definitions:

Optimal Risky Portfolio

A collection of financial investments that has the highest expected return for a given level of risk.

Risk-Free Asset

An investment with a guaranteed return, with no risk of financial loss, typically represented by government bonds.

Harry Markowitz

He is an economist renowned for his pioneering work in portfolio theory, establishing the basis for modern portfolio management with his concepts of diversification and risk-return optimization.

Nobel Prize-Winning

Recognition awarded for outstanding contributions in fields like Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences.