Problem
1. What is a consumption function, and why is it a useful device for government economists planning a tax cut?
2. Explain why permanent tax cuts are likely to lead to bigger increases in consumer spending than temporary tax cuts do.
3. In 2001 and again in 2003, Congress enacted changes in the tax law designed to promote saving. If such saving incentives had been successful, how would the consumption function have shifted?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.