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:

Given

A pre-established or assumed condition, fact, or premise in discussions, analyses, or mathematical problems.

Imferon

A brand name for iron dextran, which is used to treat iron deficiencies and iron deficiency anemia by replenishing body iron stores.

Z-track

A technique used in intramuscular injection to prevent medication leakage and minimize tissue irritation by displacing skin and tissue layers.

Irritation

A condition of inflamed or painful reaction of the skin, eyes, mucous membranes, or gastrointestinal tract.