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:

Rebellious

Characterized by a resistance to authority or control, often manifested through defiant or non-conforming behaviors.

Secure

A term often used in psychology to describe a state of being free from fear or anxiety, or in attachment theory, a healthy attachment style.

Basic Anxiety

A concept introduced by psychoanalyst Karen Horney, referring to feelings of helplessness and insecurity that arise from problematic parent-child relationships during childhood.

Neurosis

A mental health term historically used to describe a range of psychological problems characterized by anxiety, depression, or other feelings of distress.