What are the differences between national income, personal income, and disposable personal income?
What will be an ideal response?
National income is gross domestic product (GDP) minus depreciation. Personal income, which is income actually received by households, is national income minus corporations' retained earnings, plus government transfer payments and the interest on government bonds paid to households. Disposable personal income, which represents the income available for households to spend, is personal income less personal tax payments, such as the federal personal income tax.
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If disposable income falls by $50 billion and consumption falls by $40 billion, then the slope of the consumption function is
A) 1.20. B) 0.80. C) 0.70. D) 0.10.
Which of the following is true of a price floor?
a. A price floor allows supply and demand to function effectively. b. A price floor is set such that the price is not allowed to increase above a certain level. c. A price floor is beneficial to buyers in a market. d. A price floor usually creates a shortage of a good in a market. e. A price floor is set such that the price is not allowed to decrease below a certain level.
The threat of confiscated private property diminishes the incentive to invest
a. True b. False Indicate whether the statement is true or false
Exchange rate overshooting occurs
A. because product prices are sticky in the short run. B. only if investors and speculators react irrationally to any change in the monetary policies of the domestic or the foreign government. C. because interest rates are sticky. D. when one of the nations has a very high rate of inflation.