The circular flow model shows what households buy and sell in the resource market
Indicate whether the statement is true or false
F
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Which of the following statements is true?
a. When a change in income causes consumption to change, the consumption-income line shifts; however, when anything besides income changes, we move along the line. b. When a change in income causes consumption to change, we move along the consumption-income line; however, when anything besides income changes, the line shifts. c. When income or anything else affecting consumption changes, we move along the consumption-income line. d. When income or anything else affecting consumption changes, the consumption-income line shifts. e. There is no way to determine, without more information, whether a change in income or anything else will shift the consumption line or cause movement along the consumption-income line.
This year, Abigail earned $15,000 and she paid 15 percent in income and payroll taxes. She qualified for Medicaid and food stamps. For every $100 that she earns, Abigail loses $35 in Medicaid benefits and $15 in food stamps. Abigail faces an effective marginal tax rate of
a. 15 percent. b. 35 percent. c. 50 percent. d. 65 percent.
A rumor starts that says a bank has suffered significant losses and may not be able to honor its promises to depositors. This causes most of the depositors to line up in front of the bank the next morning wanting to withdraw their deposits. This is an example of:
A. interest rate risk. B. operational risk. C. credit risk. D. liquidity risk.
Treating two otherwise-equal people differently because of their race is called
A. rational discrimination. B. disparate treatment discrimination. C. adverse impact discrimination. D. "perfect" discrimination.