Question 1

In 1970,the typical U.S.household earned about $8,700.In 2015,the typical U.S.household earned about $56,516.If adjusted for inflation,the gross income of the typical U.S.household in 2015 relative to 1970 has

Accepted Answer

While the typical U.S.household earned only about $8,700 of income in 1970,it earned about $56,516 in 2015.When gross income is adjusted for inflation,however,income of that typical U.S.household was relatively stable.In fact,inflation-adjusted income has only varied between $47,130 and $57,909 since 1970.

Question 2

The portion of one's income that remains after paying for taxes and necessities is referred to as

Accepted Answer

Key term definition-discretionary income.

Question 3

In a(n)________ economy,if prices rise faster than consumer incomes,the number of items consumers can buy decreases.

Accepted Answer

In an inflationary economy,if prices rise faster than consumer incomes,the number of items consumers can buy decreases.

Question 4

The total amount of money made in one year by a person,household,or family unit is referred to as ________ income.

Accepted Answer

Key term definition-gross income.

Question 5

Components of a consumer's income consist of

Accepted Answer

A consumer's ability to buy is related to income,which consists of gross,disposable,and discretionary components.

Question 6

The most recent economic recession occurred when?

Accepted Answer

The U.S.economy experienced recessions from 1973-75,1981-82,1990-91,and in 2001.Most recently,a recessionary period began in 2007 and ended in 2009,becoming the longest in recent history.

Question 7

Disposable income refers to

Accepted Answer

Key term definition-disposable income.

Question 8

The money a consumer has left after paying taxes to use for necessities such as food,shelter,clothing,and transportation is referred to as

Accepted Answer

Key term definition-disposable income.

Question 9

The College Board reports that since 2000,college tuition and fees have increased by 160 percent while the share of family income required to pay for tuition at public four-year colleges has risen from 5 percent in 2000 to 17 percent today.This is an example of a(n)________ condition.

Accepted Answer

The College Board reports that since 2000 college tuition and fees have increased 160 percent (from $3,508 to $9,650)while family incomes have declined by 2 percent.The share of family income required to pay for tuition at public four-year colleges has risen from 5 percent in 2000 to 17 percent today.

Question 10

If taxes rise at a faster rate than incomes,consumers will

Accepted Answer

If taxes rise at a faster rate than incomes,consumers must economize since tax increases reduce disposable income.

Question 11

At the U.S.Census Bureau,gross income is referred to as

Accepted Answer

Key term definition-gross income or money income.

Question 12

Leah had an excellent year as a salesperson in 2017,earning $98,000.She paid $38,000 for necessities such as mortgage,food,and clothing.Her state and federal income taxes totaled $24,000.What was her disposable income?

Accepted Answer

Disposable income is the money that remains after paying for taxes.Disposable income = Gross income − Taxes (federal,state,and local)only.Disposable income = $98,000 − $24,000 = $74,000.

Question 13

During a recessionary period,which of the following economic behaviors would be expected?

Accepted Answer

During a recessionary period,spending,debt,and the use of credit all decline.

Question 14

In an inflationary economy,the cost to produce and buy products and services ________ as prices ________.

Accepted Answer

In an inflationary economy,the cost to produce and buy products and services increases as prices increase.

Question 15

In a(n)________ economy,the cost to produce and buy products and services escalates as prices increase.

Accepted Answer

In an inflationary economy,the cost to produce and buy products and services escalates as prices increase.

Question 16

A time of declining economic activity when businesses decrease production,unemployment rises,and many consumers have less money to spend is referred to as

Accepted Answer

Periods of declining economic activity are referred to as recessions.During recessions,businesses decrease production,unemployment rises,and many consumers have less money to spend.

Question 17

Approximately what percentage of U.S.households has an annual income between $25,000 and $99,999?

Accepted Answer

Approximately 51 percent of U.S.households have an annual income between $25,000 and $99,999.

Question 18

Gross income refers to

Accepted Answer

Key term definition-gross income.

Question 19

A decline in ________ often leads consumers to adjust their spending upwards in other categories.

Accepted Answer

A decline in the price of gasoline can lead to increases in consumer spending in other categories.

Question 20

Changes in ________ have a psychological impact on consumers,who tend to spend more when they feel their net worth is rising and postpone purchases when it declines.

Accepted Answer

A consumer's net worth would be based on personal assets such as property.If the value of their property rises,they are more confident and can spend more;if the value of their property declines,they are less confident and spend less.

Quiz 3: Scanning the Marketing Environment