According to the Model Developed in Chapter 3, When Taxes

question 7

Multiple Choice

According to the model developed in Chapter 3, when taxes decrease without a change in government spending:

• A) consumption and investment both increase.
• B) consumption and investment both decrease.
• C) consumption increases and investment decreases.
• D) consumption decreases and investment increases.

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Definitions:

Consequences

The outcomes or effects that follow from a particular action or condition, either positive or negative.

Skinner

B.F. Skinner, an influential American psychologist, known for his work in behaviorism and the development of the operant conditioning theory.

Behaviour

The actions or reactions of an object or organism, usually in relation to the environment or stimuli.

Faculty Member

An academic staff or educator belonging to a college, university, or institute who is involved in teaching, research, and possibly administrative duties.