When the Consumption Function Is Expressed as C = Ca

question 46

Multiple Choice

When the consumption function is expressed as C = Ca + b (1- t) y, taxes are collected by the government as:

• A) a constant proportion of income y.
• B) a decreasing proportion of income y.
• C) an increasing proportion of income y.
• D) a lumpsum, and independent of y.

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Definitions:

Spreadsheet

A digital document that uses columns and rows to organize data, calculations, and information, often used for accounting, budgeting, and managing data with formulas and functions.

Basic Calculations

Simple arithmetic operations, such as addition, subtraction, multiplication, and division, executed manually or through software applications.

Budget

An estimate of income and expenditure for a set period of time, often used as a financial planning tool by individuals, businesses, and governments.

Table

A structured arrangement of data made up of rows and columns, used to organize, display, and manage information systematically.