Select all that apply

Question

Which of the following result from a reduction in personal income tax rates on consumers?
Multiple select question.

Increased take-home income

Decreasing consumer purchases at each possible price level

Increasing consumer purchases at each possible price level

Decreased take-home income

Answer 1

From a reduction in personal income tax rates on consumers, the following results would apply:

• Increased take-home income
• Increasing consumer purchases at each possible price level

A reduction in personal income tax rates means consumers have more disposable income, which typically encourages them to spend more, leading to an increase in consumer purchases. The other options, "Decreasing consumer purchases at each possible price level" and "Decreased take-home income," would not result from a tax reduction.