If Taxes Rise at a Faster Rate Than Incomes, Consumers

question 242

Multiple Choice

If taxes rise at a faster rate than incomes, consumers will

• A) have less disposable income and try to economize.
• B) feel more confident in the government and therefore spend more money.
• C) use cash for purchases such as a vacation.
• D) recognize that it is the perfect opportunity to buy a car or other expensive products on credit.
• E) react by voting for all incumbent members of Congress.

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Definitions:

Cash

A form of liquid asset that includes physical currency such as banknotes and coins, and demand deposits that can be quickly converted into physical cash.

Incremental Value

The additional or extra value generated by undertaking a new project, making an investment, or initiating a new action.

Equity-Financed

A method of raising capital through the sale of shares in the company, leading to shareholder ownership.

Firm A

A placeholder name often used to refer to a specific company in examples or case studies.