If Consumption Were a Direct Function of Disposable Income, How

question 4

Essay

If consumption were a direct function of disposable income, how would a decrease in personal taxes or an increase in transfer payments affect consumption?
​

---

Definitions:

Depressed Mood

A state of persistent sadness, a key symptom of depression that can affect a person's thoughts, behavior, feelings, and sense of well-being.

Neurotransmitter

Chemical substances in the nervous system that transmit signals across a synapse from one neuron to another.

Antagonist

A substance that blocks or inhibits the effects of a neurotransmitter or hormone.

Opiate

A group of drugs derived from opium, used for pain relief, but also associated with addiction and dependence.