Which of the Following Statements Best Explains the Effects of Transfer

question 49

Multiple Choice

Which of the following statements best explains the effects of transfer payments and taxes on aggregate spending?

• A)Transfer payments and taxes affect aggregate spending directly,just as consumption does.
• B)Transfer payments and taxes affect aggregate spending indirectly by first changing disposable income and thereby changing consumption.
• C)Changes in the amount of transfer payments and taxes cancel each other and therefore have no influence on any economic variable.
• D)Transfer payments and taxes affect disposable income but have no effect on consumption.
• E)Transfer payments affect disposable income,but taxes do not.

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Definitions:

Sustainability

The practice of maintaining processes or systems in a way that does not deplete natural resources, ensuring long-term ecological balance.

Competitive Advantage

The attributes or conditions that allow a company to produce goods or services better or more cheaply than its competitors.

Environmental Costs

Expenses associated with the negative impact of a company's operations on the natural environment, including waste disposal, pollution control, and resource depletion.

Climate Change

A significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years.