Whalen_FIN1010_WK2_DiscussionQuestions.docx

Whalen_FIN1010_WK2_DiscussionQuestions.docx - Why Congress...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Why? Congress often reduces taxes on middle- and low-income taxpayers with the expectation that consumers will spend most of that money and help create more economic growth. Is this idea good or not, and why? This is to increase economic activity through the largest source of economic spending, consumer spending. When marginal propensity to consume is high, people are likely to spend additional income due to tax relief or other sources. This extra spending becomes other people’s income, due to this multiplier the government can have a much larger impact than dollars spend. This does work, and it is a clever idea, but people do not always spend their extra income. During times of economic uncertainty, consumers may be reluctant to let go of money and decide to hang on to it instead. 2. Some college students earn money that is paid to them in cash and then do not include this as income when they file their tax returns. What are the pros and cons of this practice?
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern