If a Consumer Is in a Position in Which a Borrowing

question 96

Multiple Choice

If a consumer is in a position in which a borrowing constraint limits his or her current consumption and a one-time tax is levied on his or her current income, then the tax will:

• A) lower the consumer's future consumption.
• B) not affect the consumer's future consumption.
• C) increase the consumer's future consumption.
• D) have no effect on either current or future consumption.

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Definitions:

Liberties Or Freedom

Freedom from restrictive control by authorities over one's lifestyle, actions, or political viewpoints within a societal framework.

Nullification Crisis

A confrontation between the state of South Carolina and the federal government in 1832-33 over the state's attempt to nullify federal tariffs.

Daniel Webster

An influential American statesman and senator in the early 19th century, known for his advocacy for the Constitution and the Union.

John C. Calhoun

An American statesman and political theorist from South Carolina, known for his strong defense of slavery and advocating for the rights of states.