FANDOM


Question from Past Macroeconomics Qualifying ExamEdit

Fall, 2003 - Question five - at George Mason University
What is the predictable impact on aggregate consumption of a one-time decrease in income taxes offering relief to all taxpayers but targeted more favorably at low income and high income households? In your answer refer to the following models:

  1. Keynesian consumption model;
  2. Life-Cycle hypothesis;
  3. Permanent income hypothesis

Discuss how the recent tax cut by the Republican Administration will affect short-term and long-term consumption in the United States. In your view, which of the three above-mentioned models is the most relevant in explaining the potential impact of the tax cut? Explain your reasoning.

AnswerEdit

Similar question MacroF02-4


Other QuestionsEdit

This macro-stub needs improving.

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.