Which of the Following Is NOT a Reason Why the Effects

Multiple Choice

Which of the following is NOT a reason why the effects of tax cuts on government spending dissipate and each additional change in consumption and income becomes smaller and smaller?

A) Some of the increase in income will be lost through taxation.
B) Some of the increase is saved and does not result in an increase in consumer demand.
C) Some of the increase in consumption will be an additional demand for imported goods.
D) Some of the increase is used for business investment.