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Use the Table Below to Determine the Impact on Consumption

question 26

Multiple Choice

Use the table below to determine the impact on consumption spending of a $100 increase in net taxes. Use the table below to determine the impact on consumption spending of a $100 increase in net taxes.   A)  Consumption will decrease by $80. B)  Consumption will increase by $80. C)  The marginal propensity to consume will increase to .91. D)  The marginal propensity to consume will decrease to .73. E)  The change in net taxes will not change consumption.


Definitions:

Equal Opportunity

The principle of treating all individuals the same, without discrimination based on race, gender, sexuality, religion, or other personal characteristics.

Employers

Individuals or entities that hire others to perform services or jobs in exchange for compensation.

Welfare Capitalism

An economic system that combines a predominantly market-based economy with extensive social welfare programs.

Unionization

The process by which workers form or join a union to collectively negotiate with their employer regarding wages, working conditions, and other employment terms.

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