Question

which do you think will decrease consumption more: a 10 percent decrease in after-tax income or a 10 percent decrease in stock market values? explain.

Answer 1

=> ANSWER :: A 10 Percent Decrease In After-Tax Income

*Explanation ::

-> A 10 Percent Decrease In After-Tax Income Will Decrease Consumption More.

-> After tax Income Is The Net Income Which Is Happened After Deducting all The Central, State And All Other Taxes It Is A Net income Of A Person. It Is A Amount Of Total Income That Is Available To Spend By Consumer. so If There Is Decrease In 10% Of After Tax Income Which Means Consumer Spend Decrease By 10% In The Market Which Is Called Consumption So If Consumer Spending Decrease Than Their Consumption Also Decrease Significantly.

So We Assume That A 10 percent decrease in after-tax income Is Decrease More Consumption Than A 10 percent decrease in stock market values.