To Predict the Effects of a Tax Cut on Consumption

question 94

Multiple Choice

To predict the effects of a tax cut on consumption spending, economists must have some estimate of the

• A)income effect.
• B)substitution effect.
• C)relative price effect.
• D)marginal propensity to consume.

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Definitions:

Contingency Management

A behavioral therapy technique that rewards or punishes individuals for their behaviors, often used in addiction treatment to encourage sobriety.

Detoxification Procedures

Medical or therapeutic measures taken to remove toxic substances or effects of substances from a person's body, commonly associated with substance abuse recovery.

Withdrawal Symptoms

Physical or mental symptoms that occur after stopping or reducing intake of a substance that was used regularly.

Treatment Success

The effective resolution or significant improvement of symptoms following a specified therapeutic intervention.