Question

Data from the Bureau of Labor Statistics show that the largest category of consumer spending is...

Data from the Bureau of Labor Statistics show that the largest category of consumer spending is housing.

a. True
b. False

Interest rates fall and investment falls. Which of the following could explain these changes?

a.

The government replaces a consumption tax with an income tax.
b.

None of the above is correct.
c.

The government goes from a surplus to a deficit.
d.

The government repeals an investment tax credit.
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Homework Answers

Answer #1

Part A

Answer A

The labor bureau of statistics is the US calculates the CPI every month. It takes into account the variation of price for retail goods. The current reports state that the largest spending on consumer spending is housing.

Part B

Answer-The government repeals an investment tax credit.

The investment tax credit means the tax incentives for the individual or firms to deduct a certain percentage of investment cost from their tax liability. Here the rate of interest falls then the government will repeal the investment tax credit.

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