With a temporary income tax surcharge, according to the ________, household consumption should ________
A) PIH; fall as disposable income falls
B) PIH; rise since the decrease is disposable income is temporary
C) LCH; fall since disposable income over the lifecycle falls
D) None of the above is correct since a temporary change affects neither permanent income or relative lifecycle earnings.
D
Economics
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Explain the two basic mechanisms that increase GDP per capita over the long term
What will be an ideal response?
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