Disposable income equals:
a. Consumption minus saving
b. Saving times consumption
c. Consumption plus saving
d. Saving divided by consumption
c. Consumption plus saving
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Discounting allows comparisons of
a. money values and physical values. b. interest payments on borrowed funds and interest payments on loaned funds. c. money values received at different times. d. the quantities of outputs produced by different types of capital goods.
In the Keynesian cross model, government spending as a function of national income is a(n): a. horizontal line at a fixed level of expenditure. b. vertical line at a fixed level of real GDP
c. upward-sloping curve. d. downward-sloping curve.
Kimani sells life insurance and is considering buying a $50,000 Cadillac for business purposes (thus, the expense reduces her taxable income). If Kimani is in the 40 percent marginal tax bracket, how much after-tax income will she have to give up in order to enjoy the Cadillac?
a. $20,000 b. $30,000 c. $25,000 d. $70,000
If the price of inputs rises and personal income taxes rise:
a. Aggregate demand rises, but aggregate supply does not change. b. Aggregate demand falls and aggregate supply rises. c. Aggregate demand rises and aggregate supply rises. d. Aggregate demand falls and aggregate supply falls. e. Neither the aggregate demand nor the aggregate supply change.