When Consumers Receive Tax Rebates and Use Them to Pay

question 134

Multiple Choice

When consumers receive tax rebates and use them to pay down debt rather than to increase spending:

• A) the resulting fiscal stimulus will be much larger than the initial tax rebate.
• B) the resulting fiscal stimulus will be much smaller than the initial tax rebate.
• C) the resulting fiscal stimulus will be the same size as the initial tax rebate.
• D) it is impossible to say whether the resulting fiscal stimulus will be larger or smaller.

Recognize how various factors, including policy interventions, influence market demand and supply.

Understand the concepts of the law of supply and how it reflects on the supply curve.

Grasp how the market demand curve is derived and how individual and market demands interact.

Understand the impact of price changes on the profitability and quantity supplied of goods.

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Definitions:

DR-CAFTA

The Dominican Republic-Central America Free Trade Agreement, a treaty aimed at creating free trade zones between the United States and several Central American countries, promoting trade and economic growth.

Democratic Republic of Congo

A country located in Central Africa, known for its rich natural resources as well as its complex political and social challenges.

Baby Boomers

The demographic cohort following World War II, typically born from the mid-1940s to the mid-1960s, known for significant population growth.

Digital Communication

The exchange of information through digital channels, including social media, email, websites, and mobile applications.