Which of the Following Is True of the Disposable Income

question 80

Multiple Choice

Which of the following is true of the disposable income of the households?

• A) An increase in the average price level lowers the disposable income of the households.
• B) Disposable income refers to the purchasing power of nominal income.
• C) An increase in direct taxes will lower the disposable income of the households.
• D) A decrease in government transfers will increase the disposable income of the households.
• E) Disposable income refers to the net private transfers of the household sector.

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Definitions:

Annual Dividend

The annual sum of dividends disbursed by a corporation to its stockholders.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

EPS Growth Rate

Refers to the rate at which a company's earnings per share (EPS) has grown over a specific period, usually annually, indicating the company's profitability growth.