if consumers' disposable income increases due to a permanent tax cut - isn't it correct to say that consumption will definitely increase but the extent to which it does depends on the marginal propensity to consumer and save. Therefore the effect on private saving is ambiguous as T decreases but C increases.

if consumers' disposable income increases due to a permanent tax cut - isn't it correct to say that consumption will definitely increase but the extent to which it does depends on the marginal propensity to consumer and save. Therefore the effect on private saving is ambiguous as T decreases but C increases.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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