Suppose Social Security Contributions Rise by $1 Billion While Social

question 410

Multiple Choice

Suppose Social Security contributions rise by $1 billion while Social Security benefits also rise by $1 billion. Further, personal income taxes fall by $500 million. As a result,

• A) both personal and disposable personal income should increase.
• B) national income, personal income, and disposable income should increase.
• C) disposable income should increase while personal income and national income are unchanged.
• D) personal income, disposable personal income, and national income remain unchanged.

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Definitions:

Economic Profits

Profits exceeding the total opportunity costs of all resources used in production; also known as abnormal or supernormal profits.

Hired Managers

Individuals employed to direct and control the operations, strategies, and policies of a business or organization.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production.

Different Rents

Variations in rental prices, often influenced by factors such as location, demand, and property features.