A Change in a Fixed Tax Will Cause the Consumption

question 18

Multiple Choice

A change in a fixed tax will cause the consumption schedule to

• A)become steeper.
• B)become flatter.
• C)shift in a parallel manner.
• D)remain fixed as the economy moves along the schedule.

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Definitions:

Complements

Products or services that are often used together, such that demand for one increases the demand for the other.

Complements

Products or services that are commonly consumed in conjunction with one another, where a rising demand for one results in a corresponding increase in demand for the other.

Substitutes

Goods or services that can replace each other in use, where a rise in the price of one leads to an increase in demand for the other.

Complements

Goods or services that are often used together, where an increase in demand for one leads to an increase in demand for the other.