If Congress Passed a One-Time Tax Cut in Order to Stimulate

question 59

Multiple Choice

If Congress passed a one-time tax cut in order to stimulate the economy in 2014,and tax rate levels returned to their pre-2014 level in 2015,how should this tax cut affect the economy?

• A)The tax cut would increase consumption spending less than would a permanent tax cut.
• B)The tax cut would increase consumption spending more than would a permanent tax cut.
• C)The tax cut would increase consumption spending by the same amount as would a permanent tax cut.
• D)The tax cut would raise the price level in 2014.

---

Definitions:

Transnational Virtual Corporations

Companies that operate globally without a centralized physical presence, leveraging technology to manage their business across borders.

Multinational Corporation

A company that operates in multiple countries beyond its original or home country.

Internet

is a global network of interconnected computers that communicate freely and share and exchange information.

Governmental Control

The extent to which a government regulates individuals, businesses, and organizations within its jurisdiction.