A Tax Rebate,which Is Expected to Be Offered in This

question 101

Multiple Choice

A tax rebate,which is expected to be offered in this and all future years,will

• A)have a small positive effect on consumption and aggregate demand.
• B)have no effect on consumption and aggregate demand.
• C)will have a significant positive effect on consumption and aggregate demand, with aggregate demand growing by a multiple of the tax rebate.
• D)increase aggregate supply and aggregate demand.

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Definitions:

Initial Cash Outflow

The initial expenditure involved in a project or investment, often referring to the sum of money paid at the start.

Required Return

The minimum profit or yield that an investor aims for when investing in a financial instrument or project.

Payback Period

The duration required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.

Heating System

A mechanism for maintaining temperatures at an acceptable level; by using thermal energy within a home, building, or other dwelling.