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:

Repression

A defense mechanism where stressful thoughts or memories are unconsciously blocked from entering awareness.

Reaction Formation

A psychological defense mechanism where an individual behaves in a way that is directly opposite to their true feelings or impulses.

College Student

An individual enrolled in an institution of higher education to pursue a degree or certificate.

Phallic Stage

A stage in Freudian psychosexual development, occurring from roughly ages 3 to 6, where the libido's focus is on the genital area and themes of difference and identification are explored.