Refer to Table 19-31. The table above represents hypothetical ...

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Refer to Table 19-31. The table above represents hypothetical data from the National Income Accounts for 2015. Use the data to calculate personal income and disposable personal income.
 
  What will be an ideal response?

Question 2

Refer to Figure 27-1. An increase in taxes would be depicted as a movement from ________, using the static AD-AS model in the figure above.
 
  A) A to B B) E to B C) B to C D) C to D E) B to A

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Answer to Question 1

Personal Income = National income - Retained earnings + Transfer payments + Interest on government bonds.
Substituting the table values:
Personal Income = 7,400 - 480 + 1,000 + 450
= 8,370 billion.

Disposable personal income = Personal Income - Personal Taxes
= 8,370 - 1,100 = 7,270 billion.

Answer to Question 2

E