2. A tax reduction can also be used to push an economy to full employment. When taxes...

Question:

2. A tax reduction can also be used to push an economy to full employment. When taxes are reduced, the disposable income of consumers will increase, stimulating consumption. At the higher level of consumption, both real income and employment will expand. Tax reductions can usually influence consumption rapidly because the withholding system can be utilized to alter disposable income almost immediately.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Macroeconomics Private And Public Choice

ISBN: 9780123110701

2nd Edition

Authors: James D Gwartney; Richard Stroup; A H Studenmund

Question Posted: