« previous next »

Author Question: What will be the effect of a tax cut on consumption if consumption offers diminishing returns? ... (Read 65 times)

Collmarie

  • Hero Member
  • *****
  • Posts: 569
on: Jun 30, 2018
What will be the effect of a tax cut on consumption if consumption offers diminishing returns?
 
  What will be an ideal response?

Question 2

Which of the following is NOT included in the money supply when the transactions approach is used?
 
  A) currency B) traveler's checks
  C) money market deposit accounts D) transaction deposits


macmac

  • Sr. Member
  • ****
  • Posts: 343
Reply #1 on: Jun 30, 2018
Answer to Question 1

If consumption offers diminishing returns, consumers may hold back on spending their tax cuts. They will spread their spending over the long term rather than consuming the proceeds of the tax cut all at once. Thus, consumption may not increase immediately.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

First-pass effect: (a) drugs are absorbed; (b) drugs enter hepatic portal circulation and go directl First-pass effect: (a) drugs are absorbed; (b) drugs enter hepatic portal circulation and go directl
Drugs and their effect table Drugs and their effect table
Diet Soda's Consumption's Association with Increased (not Decreased) Prevalence of ... Diet Soda's Consumption's Association with Increased (not Decreased) Prevalence of ...
The U.S. Department of Agriculture offers the SuperTracker tool to help you track, analyze, and plan ... The U.S. Department of Agriculture offers the SuperTracker tool to help you track, analyze, and plan ...
Greenhouse effect. Greenhouse effect.
Smoking’s effect on lungs Smoking’s effect on lungs
Video: Semidiscontinuous DNA replication

For a complete list of videos, visit our video library