The Reward Offered to Households to Refrain from Spending Their

question 118

Multiple Choice

The reward offered to households to refrain from spending their income on current consumption and instead save their income is

• A)rent
• B)credit
• C)utility
• D)interest
• E)forgone utility

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Definitions:

Social Security Benefits

Payments made to eligible individuals by the government, including retirement, disability, and survivor benefits.

Progressive Tax

Places greater burden on those with best ability to pay and little or no burden on the poor (for example, federal personal income tax).

Proportional Tax

A tax whose burden falls equally among the rich, the middle class, and the poor.

Regressive Tax

A taxation system where the tax rate decreases as the taxable amount increases, leading to a higher tax burden on lower-income individuals relative to higher-income individuals.