If We Lower Taxes Today but Raise Them in the Future,and

question 89

Multiple Choice

If we lower taxes today but raise them in the future,and if b = 1,

• A)household wealth rises because they save less.
• B)households will increase today's consumption.
• C)present wealth remains unchanged and consumption does not change.
• D)the government can rely on households to spend more today.
• E)saving today will fall and lifetime consumption rises.

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Ownership Position

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