An increase in national income is likely to ?
Correct answer: A. Decrease tax receipts
- A. Decrease tax receipts
- B. Worsen the balance of trade
- C. Automatically cause an increase in government spending
- D. causes an increase in injections into the economy
Explanation
Higher national income generally produces higher tax receipts because taxable incomes and spending tend to rise. Government spending does not automatically rise, and the other options are not the most direct general effect.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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