Which of the following correctly describes the effects of a decrease in net taxes?
a. Disposable income increases, consumption decreases, and saving decreases.
b. Disposable income increases, consumption increases, and saving increases.
c. Disposable income decreases, consumption increases, and saving increases.
d. Disposable income decreases, consumption decreases, and saving decreases.
e. There is no effect on either disposable income, consumption, or saving.
b
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The transactions demand for money will increase when
A) the rate of interest increases. B) the price level falls. C) nominal Gross Domestic Product (GDP) increases. D) nominal Gross Domestic Product (GDP) decreases.
Suppose the United States decides to impose a $1,000 tax on every Japanese minivan sold in the United States. This is an example of
a. a tariff b. a subsidy c. comparative disadvantage d. the diversity of industry argument e. a quota