A One-Time Tax Rebate, Which Is Not Expected to Be

Multiple Choice

A one-time tax rebate, which is not expected to be extended in future years, will

A) have a small positive effect on consumption and aggregate demand.
B) have no effect on consumption and aggregate demand.
C) have a significant positive effect on consumption and aggregate demand, with aggregate demand growing by a multiple of the tax rebate.
D) increase aggregate supply and aggregate demand.
E) have a significant negative effect on aggregate demand as people will expect taxes to rise in the future.