The Higher the Tax Rate,government Spending Unchanged,the

question 13

Multiple Choice

The higher the tax rate,government spending unchanged,the

• A) higher the level of intended spending.
• B) lower the equilibrium level of GDP.
• C) higher the amount of consumption.
• D) lower the 45-degree line.
• E) higher the amount of disposable income.

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Definitions:

Utility Function

A mathematical representation in economics that captures an individual's preference ranking for different bundles of goods or outcomes.

Nonlabor Income

Income received from sources other than employment, such as investments, pensions, or inheritances.

Wage Rate

The fixed or variable payment earned by employees for their work or services, typically documented on an hourly, daily, or piecework basis.

Indifference Curves

A graph showing different bundles of goods between which a consumer is indifferent, illustrating preferences and trade-offs.