A One-Time Tax Rebate, Which Is Not Expected to Be

question 23

Multiple Choice

A one-time tax rebate, which is not expected to be extended in future years, will

• A)have a small positive effect on consumption and aggregate demand.
• B)have no effect on consumption and aggregate demand.
• C)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.
• E)have a significant negative effect on aggregate demand as people will expect taxes to rise in the future.

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Definitions:

Net Loss

Occurs when a company's expenses exceed its revenues during a specific period, leading to a negative profit.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Revenues

The total amount of income generated by the sale of goods or services related to the company's primary operations.

Expenses

Costs incurred in the process of earning revenue, including operational, administrative, and marketing costs.