Reading and answers the question:
One of the unknown factors with tax cuts is what consumers will do1. According to the passage, tax cuts automatically provide more money for
with the extra income thereby made available to them. Such cuts are
usually made with the aim of stimulating a flagging economy, but
the effects on growth tend to be negligible if consumers, instead
5 of going on a spending spree buying durable goods such as home appliances,
decide either to pay off their accumulated debts or hold on to the
extra cash in the form of savings. And the fact is that usually when
a tax cut is implemented, company investment tends to be running
at a low ebb, and only the consumer has the wherewithal to provide
10 a fresh impetus.
2. According to the passage, the effects of a tax cut are
3. It may be inferred from the passage that a government which reduces taxes usually wants consumers to
4. According to the passage, under what circumstances are tax cuts generally introduced?
5. The passage implies that