When the consumption schedule is plotted on a graph,
A. consumption is on the horizontal axis and disposable income is on the vertical axis.
B. consumption is on the horizontal axis and saving is on the vertical axis.
C. consumption is on the vertical axis and saving is on the horizontal axis.
D. consumption is on the vertical axis and disposable income is on the horizontal axis.
Answer: D
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Explain why proponents of supply-side effects of tax rate variations who also believe that tax-rate changes influence aggregate demand might claim that cuts in marginal income tax rates can potentially push up real Gross Domestic Product (GDP)
without generating inflation.
Which of the following is not a credit item (+) in the U.S. balance of payments?
a. imports of cars from Japan b. any transaction that results in an inflow of dollars c. a capital outflow d. a U.S. firm's purchase of steel from a European steel mill e. an increase in American vacations abroad