If Consumers Expect Prices to Rise and Shortages to Occur

question 9

Multiple Choice

If consumers expect prices to rise and shortages to occur in the future, then there will be a shift:

• A) Upward of both the consumption and saving schedules
• B) Downward of both the consumption and saving schedules
• C) Of the consumption schedule upward and of the saving schedule downward
• D) Of the consumption schedule downward and the saving schedule upward

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Definitions:

Employee Earnings

The total compensation an employee receives, including wages, salaries, bonuses, and other forms of payment, before any deductions.

W-3 Form

An IRS tax form used in the United States to transmit a summary of all W-2 forms issued by an employer to the Social Security Administration.

FICA-OASDI

The portion of Social Security tax collected under the Federal Insurance Contributions Act, dedicated to funding the Old Age, Survivors, and Disability Insurance program.

Employees' Contribution

The portion of earnings that workers contribute to designated plans, such as retirement savings or health insurance.