Household spending:

[7] Household spending:

A) is based primarily on unearned income.

B) tends to fluctuate widely as the economy moves through the business cycle.

C) is larger than the combined spending of all U.S. businesses, government units, and foreign buyers.

D) all of these answers are correct.

[9] If the only spending in the economy were household spending based on earned income, and if households always spent all of their incomes, from one year to the next the level of economic activity would:

A) increase.

B) decrease.

C) not change.

D) change in no predictable way.

[10] Injections into the spending stream come from:

A) household earned income.

B) profits, rents, and interest, but not wages.

C) household earned income, transfer payments, and borrowing.

D) sources other than household earned income, and include transfer payments and borrowing.

[11] Which of the following is an injection into the spending stream?

A) Taxes paid to the government.

B) Spending from transfer payments.

C) Spending from household earned income.

D) All of these answers are correct.

[14] Holding all else equal, you would expect the level of economic activity to increase if household:

A) saving were less than taxes.

B) saving plus taxes were more than earned income.

C) saving plus taxes were less than spending from borrowed funds and transfer payments.

D) all of these answers are correct.

[15] Considering only the household sector, an economy will:

A) expand as spending from transfers and borrowing, and savings and taxes increase.

B) contract as spending from transfers and borrowing, and savings and taxes increase.

C) expand as spending from transfers and borrowing increases, and contract as savings and taxes increase.

D) contract as spending from transfers and borrowing increases, and expand as savings and taxes increase.

 

In: Economics

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