National income is equal to gross domestic product minus:
a. indirect business taxes.
b. depreciation.
c. personal taxes.
d. retained earnings.
e. consumption spending.
Question 2
When the supply of credit is fixed, an increase in the price level stimulates the demand for credit, which in turn reduces consumption and investment spending. This argument is called the:
a. real balances effect.
b. interest-rate effect.
c. net exports effect.
d. substitution effect.
