Suppose each of the following news items appears on the evening news. Which one would most likely cause consumption spending to increase?
a. "Layoffs reach record high"
b. "Government to increase taxes with the start of the next quarter"
c. "Stock market drops 10%"
d. "Government to issue tax rebates at the end of next month"
e. "Bankruptcies increase 20% over the last six months"
D
You might also like to view...
An intertemporal budget constraint ________
A) describes how much time an individual consumer has to spend their disposable net national product B) is independent of the real interest rate and wealth of the household C) divides consumption spending into three categories: spending on durables, non-durables and services D) describes how much a person can consume today versus tomorrow
The concept of "proved reserves" refers to the amount of a resource that can be produced
a. in one year's time. b. in the next ten years. c. before it runs out. d. at current prices and technology.
If a price ceiling of $8 were placed in the market in the graph shown, which area represents deadweight loss?
A. B + D + F + G B. E C. F + G D. B + D
It is estimated that a 10 percent decline in income will reduce cigarette smoking by 1.4 percent. From this information one can conclude that cigarettes are most likely:
A. a necessity. B. a large portion of one's budget. C. a luxury. D. an inferior good.