Suppose Real Disposable Income Increases by $1,000

question 118

Multiple Choice

Suppose real disposable income increases by $1,000. Given this information, we know that

• A) consumption will generally increase by exactly $1,000.
• B) consumption will generally increase by less than $1,000.
• C) consumption will generally increase by more than $1,000.
• D) saving will generally increase by exactly $1,000.

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Definitions:

Medicare

A federal health insurance program in the United States primarily for people aged 65 and over, as well as for some younger individuals with disabilities.

Budget Deficit

The situation when government expenditures exceed its revenues within a specific period.

Defense Spending

Governmental expenditure on military and defense activities, including salaries for military personnel, equipment, research, and development.

Government Spending

The total expenditure incurred by a government on goods, services, and public projects, utilized for economic management and social welfare.