Question

A reduction in personal income tax will Blank______.
Multiple choice question.

lower take-home income and increase consumer purchases

raise take-home income but have no effect on consumer purchases

raise take-home income and increase consumer purchases

have no effect on take-home income but increase consumer purchases

Answer 1

The correct choice is:

**raise take-home income and increase consumer purchases**.

A reduction in personal income tax increases the amount of money individuals take home, which typically leads to increased consumer spending.