"Any tax cut to increase demand for output should favor lower-income people" is a ________ statement about ________ policy.

The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education. Savings = ?0 + 0 Edu + ?1Inc + u The variable ‘Edu' takes a value of 1 if the person is educated and the variable ‘Inc' measures the income of the individual. ? Refer to the model above. The benchmark group in this model is _____.

A. the group of educated people B. the group of uneducated people C. the group of individuals with a high income D. the group of individuals with a low income

Which component of aggregate demand is involved in the wealth effect caused by a price level change?

a. government purchases b. investment c. consumption d. disposable income