The size of the underground economy would tend to decrease if the government of a country
A) decreased government regulations on businesses.
B) made over-the-counter drugs illegal.
C) increased income tax rates.
D) increased business taxes.
Answer: A
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Refer to the scenario above. If both individuals are offered movie tickets worth 40 utils today instead of the gift voucher, then which of the following statements is true?
A) Both Susan and Jim will prefer to retain the gift voucher. B) Both Susan and Jim will prefer the movie tickets over the gift voucher. C) Susan will prefer the gift voucher, while Jim will prefer the movie ticket. D) Jim will prefer the gift voucher, while Susan will prefer the movie ticket.
Which of the following would be considered an investment in human capital?
a. education b. a teacher's blackboard c. the purchase of a new computer to enhance labor productivity d. All of the above are correct.
A bank that is liquid:
A. has assets that can be readily converted into cash and money. B. is diversified in its holdings of financial assets. C. can sell short-term bonds to buy long-term bonds. D. has sufficient assets to cover its long-term liabilities.
In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite. B) high relative to expected marginal benefits of the agreement. C) low relative to expected marginal benefits of the agreement. D) determined by the Environmental Protection Agency.