In the traditional Keynesian model, an increase in current taxes
A) increases disposable income but does not affect consumption.
B) decreases both disposable income and consumption.
C) decreases disposable income but increases consumption.
D) has no effect on either disposable income or consumption.
B
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When prices are predetermined, the level of output that equals aggregate expenditure is called ________ output.
A. induced B. short-run equilibrium C. potential D. the natural rate of
In the above, which figure(s) has (have) at least one point at which the slope equals zero?
A) Figure B only B) Figures A and C C) Figure D only D) Figures A, C, and D E) Figures A and D
If not all goods are essential, a consumer will end up optimizing at a corner solution.
Answer the following statement true (T) or false (F)
Nominal and real wage rates
A) must always change by the same amount. B) must always change in opposite directions by the same amount. C) must always change in the same direction but could change by different amounts. D) could change in opposite directions. E) must always change in the same direction, and the nominal wage rate must change more rapidly than the real wage rate.