Answer the question on the basis of the following data. The data suggest that
A) consumption varies inversely with after-tax income.
B) consumption varies directly with after-tax income.
C) consumption and after-tax income are unrelated.
D) a tax increase will increase consumption.

Question

Answer the question on the basis of the following data.  The data suggest that
A) consumption varies inversely with after-tax income. 
B) consumption varies directly with after-tax income. 
C) consumption and after-tax income are unrelated. 
D) a tax increase will increase consumption.

Quizplus · Accepted Answer

The given data does not provide any information about taxes, and therefore D) "a tax increase will increase consumption" cannot be inferred. However, the data does show a positive correlation between after-tax income and consumption, indicating that as after-tax income increases, consumption also increases. This is consistent with choice B) "consumption varies directly with after-tax income."

Answer the Question on the Basis of the Following Data