In the consumption function model, the 45-degree line represents where
A) the real disposable income is equal to zero.
B) planned real saving is equal to zero.
C) planned real consumption spending is equal to zero.
D) planned real saving is greater than actual real savings.
Answer: B. planned real saving is equal to zero.
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Refer to the above figure. If the relevant aggregate demand curve was AD2, the government could do all of the following to close the existing gap EXCEPT
A) increase government spending on roads. B) reduce marginal tax rates. C) reduce corporate taxes. D) reduce defense spending.
As long as marginal cost is decreasing, marginal product is
a. less than average product. b. greater than average product. c. equal to average output. d. equal to total product.
When formulating financial policy, managers also have to consider the appropriate balance between:
A. receivables and payables. B. interim and final dividends. C. short-term and medium-termfinance. D. short-term and long-termfinance.
The federal income tax is consistent with the __________ principle of taxation, whereas an excise tax on sporting event tickets is consistent with the ___________ principle of taxation
A. benefits-received; ability-to-pay. B. benefits-received; pay-as-you-go. C. ability-to-pay; benefits-received. D. ability-to-pay; pay-as-you-go.