If consumption were a direct function of disposable income, how would a decrease in personal taxes or an increase in transfer payments affect consumption?
Consumption would increase if personal taxes decreased since this would increase disposable income (total income would not have changed as a result of the taxes). An increase in transfer payment income would also similarly cause an increase in consumption.
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Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. What are the opportunity costs of producing 1 orange for Alpha and Beta, respectively?
a. 0.25 apples; 0.5 apples b. 9 apples; 4 apples c. 0.5 apples; 0.25 apples d. 2 apples; 4 apples
Coins and dollar bills are money in the form of
a. barter b. currency c. value d. capital e. specie
Refer to the information provided in Table 19.8 below to answer the question(s) that follow.Table 19.8Total IncomeTotal Taxes$20,000 $2,000 40,000 4,800 60,000 9,000 80,000 16,000Related to the Economics in Practice on page 393: Refer to Table 19.8. At an income level of $80,000, the average tax rate is
A. 2%. B. 5%. C. 15%. D. 20%.
As commercial banks keep more excess reserves, money creation
A. decreases. B. increases. C. remains the same. D. could either increase or decrease.