--%>
Assignment Help - homework help

Near-term policy

How might expectations of a near-term policy reversal weaken fiscal policy depend on changes in tax rates? 

E

Expert

Verified

A reduction in tax rates might be enacted to stimulate consumer spending.  If households attain the tax cut but expect it to be reversed in the near future, they might hesitate to rise their spending.  Believing that tax rates will increase again (and possibly concerned that they will rise to rates higher than before the tax cut), households may instead save their added after-tax income in anticipation of requiring to pay taxes in the future.

   Related Questions in Finance Basics

  • Q : Describe Section 28.00 Section 28.00 :

    Section 28.00: It is a Control Section of Budget Act which authorizes the Director of Finance to support the augmentation or diminution of items of expenditure for the receipt of un-anticipated federal funds or other non-state funds, and which identif

    		•
  • Q : Define Allotment Allotment : The

    Allotment: The permitted division of an amount (generally of an appropriation) to be expended for a specific purpose throughout a particular time period. An allotment is usually authorized on line item expenditure basis by program or

    		•
  • Q : Assignments i want to write final

    i want to write final report about my state Texas. using the resources that i attached and the other resources to cover the outlines.

    		•
  • Q : What is Abatement Abatement : A

    Abatement: A decrease to an expense which has already been made. In state accounting, only specific kinds of receipts are accounted for as abatements, comprising refund of overpayment of salaries, rebates from vendors and third partie

    		•
  • Q : Define Cost-of-Living Adjustments

    Cost-of-Living Adjustments (COLA): Increases offered in state-funded programs which comprise periodic adjustments predetermined in state law (statutory, like K-12 education apportionments), or established at optional levels (that is discretionary) by

    		•
  • Q : Effect of bank charges discount

    What happens while a bank charges discount interest on a loan? While a bank charges discount interest on a loan the required interest payment is subtracted through the loan proceeds at the time the loan is made. It makes the effective interest

    		•
  • Q : What is Department Department: The

    Department: The governmental organization, generally belonging to the third level of the state organizational hierarchy as stated in the Uniform Codes Manual.

    		•
  • Q : Semiannua compounding It is now January

    It is now January 1. You plan to make a total of 5 deposits of $600 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 14% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. How much will be in your account

    		•
  • Q : What are Feeder Funds Feeder Funds :

    Feeder Funds: For lawful basis accounting purposes, funds into which some taxes or fees are deposited on collection. In some situations administrative costs, collection expenses, and refunds are paid. The balance of such funds is transferable at any t

    		•
  • Q : Explain accepting or rejecting of

    For a specified IOS and MCC, how do financial managers decide which proposed capital budgeting projects to accept, and which to reject? For a specified IOS and MCC, all independent projects that plot on the IOS above the MCC are accepted. Those

    		•