Which of the following statements is true?
a. National income is total income earned by households whereas personal income is total income received by households (including transfer payments).
b. Disposable personal income equals personal income minus personal taxes.
c. The expenditures approach and the income approach yield the same GDP figure.
d. All of these.
d
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Some policymakers have argued that products like cigarettes, alcohol, and sweetened soda generate negative externalities in consumption. All else equal, if the government decided to impose a tax on soda, the equilibrium quantity of soda would ________
and the equilibrium price of soda would ________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Suppose you run a charity that raises money for a worthy public good. Your donors may be concerned about how much of each dollar that is raised is put back into more fund-raising. a. Suppose the marginal product of a dollar put into fundraising is initially increasing but eventually diminishing. How much will the last dollar spend on fundraising raise?
b. If everyone considers their own contribution to this charity as the marginal contribution, what will be their impression of how much they are really helping the public good? c. Would you expect your answer to (b) to make it harder for you to raise money for your charity? d. How might your answer to (c) explain why some charities make a point of informing people that they have placed a cap on their fund raising budget -- or that they have placed a cap on how many people will be approached during the fund raising campaign? What will be an ideal response?