Which of the Following Is True of the Disposable Income

question 78

Multiple Choice

Which of the following is true of the disposable income of the households?

• A)An increase in the average price level lowers the disposable income of the households.
• B)Disposable income refers to the purchasing power of nominal income.
• C)Increase in direct taxes will lower disposable income.
• D)Decrease in government transfers will increase disposable income.
• E)Disposable income refers to the net private transfers of the household sector.

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods, given a set of inputs.

Unattainable

Describes a goal, level, or condition that cannot be achieved or reached, often used in the context of economic production and efficiency.

After Trade

After trade refers to the state of an economy, market, or trading partners following the completion of trade transactions, often highlighting changes in economic indicators or balances.

Production

The process of creating goods and services using inputs such as labor, capital, and raw materials.