All Else Being Equal, If Consumption Declines as a Share

question 159

Multiple Choice

All else being equal, if consumption declines as a share of GDP, then

• A)people must be saving less.
• B)people will consume less in the future.
• C)there must have been an increase in GDP.
• D)people will consume more in the future.
• E)there must have been a decrease in GDP.

Understand the role of taxes in addressing externalities and funding public services.

Identify the sources of government revenue and the biggest expenditure programs.

Understand the principles of tax efficiency and factors that contribute to efficient tax systems.

Comprehend how taxes affect consumer surplus and the generation of deadweight loss.

---

Definitions:

Premium

An amount paid for an insurance policy or the amount by which a bond or stock sells above its face value.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined call price.

Stated Dollar Amount

A specific monetary value declared or agreed upon, which is often used in financial contexts for contracts or transactions.

Par Value

The face value of a bond or the stock value stated in the corporate charter, often set at a minimal amount.