In a Model with Income Taxes, If Net Exports Decrease

question 36

Multiple Choice

In a model with income taxes, if net exports decrease, which of the following is FALSE?

• A)the budget deficit will not be affected
• B)the budget deficit will increase
• C)disposable income will decrease
• D)saving will decrease
• E)income will decrease by more than net exports

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Definitions:

Fixed Costs

These are business expenses that do not vary with the level of goods or services produced, such as rent, salaries, and insurance.

Accounting Break-even

The point at which a company's total revenues equal its total expenses, resulting in neither profit nor loss, from an accounting perspective.

Production Process

The sequence of operations that transforms raw materials or inputs into finished goods or services.