If net taxes decrease, which of the following would occur?
a. Disposable income decreases, consumption at any income level increases, and the consumption-income line shifts upward.
b. Disposable income increases, consumption at any income level increases, and the consumption-income line shifts downward.
c. Disposable income increases, consumption at any income level increases, and the consumption-income line shifts upward.
d. Disposable income decreases, consumption at any income level decreases, and the consumption-income line shifts downward.
e. Disposable income increases, consumption at any income level decreases, and the consumption-income line shifts downward.
C
You might also like to view...
How is the velocity of circulation calculated?
What will be an ideal response?
Should autonomous consumption rise by one dollar, the effect of this on equilibrium income can be offset if net taxes are
A) raised by one dollar. B) lowered by one dollar. C) raised by c dollars. D) lowered by c dollars. E) raised by (1/c) dollars.
Which one of the following statements is true in the four-sector circular model?
a. Money flows from government to households for taxes. b. Money flows from foreign economies to households for exports. c. Money flows from government to firms for goods and services. d. Money flows from firms to foreign economies for exports. e. Money flows from households to foreign economies for resources.
Nominal output is the ________ of goods and services, and real output is the ________ of goods and services.
A. actual amount; dollar value B. dollar value; actual amount C. dollar value with inflation; dollar value D. actual amount; dollar value with inflation