If Income Increases Due to a Decrease in Taxes,then

question 2

Multiple Choice

If income increases due to a decrease in taxes,then

• A) utility will increase because consumers can afford a larger bundle of goods.
• B) utility will fall because consumers will be forced to buy a smaller bundle of goods.
• C) utility will remain constant.
• D) utility will increase because consumers will be forced to buy a smaller bundle of goods.

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Definitions:

Current Maturities

The portion of long-term debt or loan obligations that is due to be paid within the coming fiscal year.

Long-term Debt

Loans or financial obligations that are due for repayment beyond the next 12 months or the current business cycle.

FICA Taxes

Taxes designed to provide workers with supplemental retirement, employment disability, and medical benefits.

Employee Earnings

The total amount of money paid to an employee by an employer, including wages, salaries, bonuses, and commissions.