If real disposable income fell during a particular year, we can conclude that
A) personal taxes increased.
B) inﬂation occurred.
C) transfer payments declined.
D) none of these necessarily occurred.

Question

Quizplus · Accepted Answer

A decrease in real disposable income does not necessarily mean that personal taxes increased, inflation occurred, or transfer payments declined. It could be due to other factors such as a decrease in nominal income or an increase in non-tax obligations.

If Real Disposable Income Fell During a Particular Year, We