Which of the Following Is True of the Relationship Between

question 55

Multiple Choice

Which of the following is true of the relationship between disposable income and consumption?

• A)Disposable income and consumption are both dependent variables.
• B)Disposable income and consumption are both independent variables.
• C)Disposable income is the dependent variable and consumption is the independent variable.
• D)Consumption is the dependent variable and disposable income is the independent variable.
• E)Disposable income and consumption are negatively related to each other.

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Definitions:

Trade

The exchange of goods, services, or both within and between countries.

Deadweight Loss

An economic inefficiency occurring when a market outcome does not maximize total surplus due to a distortion, like a tax or subsidy.

Tariff

A tax imposed by a government on imported goods, typically to protect domestic industries or to generate revenue.

Domestic Consumers

Persons or households in a nation acquiring goods and services for individual consumption.