6. According to life-cycle models of consumption, a $1000 tax cut would have the largest impact...

 

Transcribed Image Text:

6. According to life-cycle models of consumption, a $1000 tax cut would have the largest impact on consumption spending when a. The tax cut is permanent b. The tax cut is temporary, and tax rates will steadily rise in subsequent years c. The tax cut is temporary, and tax rates will suddenly jump in subsequent years d. None of the above-A $1000 tax cut has the same impact on consumption spending regardless of whether it is temporary or permanent 6. According to life-cycle models of consumption, a $1000 tax cut would have the largest impact on consumption spending when a. The tax cut is permanent b. The tax cut is temporary, and tax rates will steadily rise in subsequent years c. The tax cut is temporary, and tax rates will suddenly jump in subsequent years d. None of the above-A $1000 tax cut has the same impact on consumption spending regardless of whether it is temporary or permanent

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is a The tax cut is permanent Explanation Lifecycle models of consumpt... View the full answer