Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Older populations tend to spend less when taxes increase.
B
Younger populations are unaffected by tax changes.
C
Middle-income families will always increase spending with tax cuts.
D
High-income individuals are more likely to change their spending habits based on tax increases.
Understanding the Answer
Let's break down why this is correct
Answer
The demographic composition of a population, which includes factors like age, income, and education level, greatly affects how people respond to tax changes. For example, younger people might be more willing to spend money on entertainment or technology, while older individuals may focus on saving for retirement. When taxes increase, younger consumers might cut back on discretionary spending, while older consumers might change their saving habits. This means that if a government raises taxes, the impact on spending will differ based on who is in the population. Understanding these differences helps businesses and policymakers predict how tax changes will affect the economy.
Detailed Explanation
Older people often have fixed incomes. Other options are incorrect because Many think young people don't care about taxes; It's a common belief that tax cuts mean more spending.
Key Concepts
demographic impact
Topic
Tax Burden and Consumer Behavior
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.