If net taxes are included in the model, the equation that shows consumption at each level of income is: C = a + b(Y - T) or C = a + bY - bT
a. True
b. False
A
You might also like to view...
Which of the following is not a government activity that is involved in public finance?
A. Running government-owned enterprises such as hospitals, utilities, and lotteries. B. Redistributing income through various taxes and income-transfer payments. C. Providing public goods and services such as national defense and education. D. Regulating the activities of firms in the financial sector of the economy.
According to the quantity theory, in the long run, an increase in the growth rate of ________ leads to an increase in the ________
A) real GDP; inflation rate B) the quantity of money; growth rate of real GDP C) the quantity of money; inflation rate D) real GDP; growth rate of velocity
If price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. The price elasticity of supply is
a. 1/2 = 0.5 b. 1.0 c. 11/6 = 1.8333 d. 9/4 = 2.25 e. 2.0
Which of the following hinders economic freedom?
a. Lower taxes b. Regulations on emissions from automobiles c. International trade d. Secure private property rights e. A democratic government