It is late$2023,$ and the Canadian economy is showing signs of slipping into a potentially deep recession. Government policymakers are searching for$$ income$-$tax$-$policy changes that will bring about a significant and lasting boost to real consumption spending.

According to the logic of the permanent income$$ hypothesis, the proposed$$ income$-$tax$-$policy changes should involve

Part $2$

A$.$

$$short$-$lived tax reductions.

B$.$

$$long$-$lasting tax increases.

C$.$

$$long$-$lasting tax reductions.

D$.$

$$short$-$lived tax increases.