The difference between personal income and disposable personal income is
A. personal income includes indirect business taxes while disposable income does not.
B. disposable personal income is what is left after personal income taxes have been paid while personal income includes personal income taxes.
C. personal income includes transfer payments while disposable personal income does not.
D. personal income is what is left after personal income taxes have been paid while disposable income includes personal income taxes.
Answer: B
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What impact did the change in housing prices during 2002 to 2005 have within the framework of the AD/AS model?
a. Declining housing prices reduced aggregate demand shifting AD leftward. b. Rising housing prices increased aggregate demand shifting AD rightward. c. Rising housing prices led to increased construction shifting LRAS leftward. d. Declining housing prices caused SRAS to shift leftward.
Suppose there is an increase in government spending. To stabilize output, the Federal Reserve would
a. increase government spending. b. increase the money supply. c. decrease government spending. d. decrease the money supply.
Recall the Application about the time involved in including cell phones in the calculation of the Consumer Price Index (CPI) to answer the following question(s).According to the Application, as new products are constantly invented and introduced on the market:
A. the bias in the CPI can be large. B. the bias in the CPI tends to become smaller. C. the bias in the CPI will eventually disappear. D. the bias in the CPI will remain virtually unchanged.
Related to the Economics in Practice on page 154: According to the Economics in Practice feature, productivity of the firms participating in the United States Technical Assistance and Productivity Program
A. grew by 15 percent in the first year and continued to grow for more than a decade afterward. B. doubled during the first two years and then declined for the rest of the decade. C. started off declining for the first decade but then grew during the second decade. D. grew only slightly in the first few years and then stopped growing in the years that followed.