If Households Expect an Increase in Their Future Incomes, They

question 246

Multiple Choice

If households expect an increase in their future incomes, they will save

• A) and consume less today
• B) less and consume more today
• C) and consume more today
• D) more and consume less today

---

Definitions:

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear, deterioration, or obsolescence.

Tax Rate

The amount of income or profits upon which tax is imposed for persons or businesses.

Sales

The total amount of revenue generated by a company through the sale of goods or services before any costs or expenses are deducted.

Operating Cash Flow

The cash generated from a company's regular business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.