Flow of household income and expenditures

Flow of household income and expenditures

In principle, there are many ways for a farm household to adjust its decisions in response to a fixed direct payment. When a household's income goes up, its expenditures also change-either through consumption, savings, or taxes. Consumption and savings decisions, in particular, can have implications for the farm business. The household may also change its allocation of labor between the farm business, off-farm activities, and leisure.


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