If Autonomous Net Taxes Decrease,which of the Following Correctly Describes

question 67

Multiple Choice

If autonomous net taxes decrease,which of the following correctly describes the effects?

• A)Disposable income increases,consumption decreases,and saving decreases.
• B)Disposable income increases,consumption increases,and saving increases.
• C)Disposable income decreases,consumption increases,and saving increases.
• D)Disposable income decreases,consumption decreases,and saving decreases.
• E)There is no effect on either disposable income,consumption,or saving.

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Definitions:

Operating Assets

Assets that are used for the day-to-day operations of a business such as cash, inventory, and machinery.

Residual Income

The amount of income that an individual or company has after subtracting all costs and expenses, including the cost of capital.

Net Operating Income

The income generated from a company's everyday business operations, indicating the profitability from core operations before interest and taxes.

Contribution Margin

The amount by which sales revenue exceeds variable costs of a product, used to cover fixed costs and generate profit.