Which of the following statements best represents the opinion of many economists regarding the impact that changes in tax laws have had on recent changes in income inequality in the United States?
A) Reductions in income tax rates have favored high-income individuals more than low-income individuals. As a result, reductions in federal income tax rates have led to more income inequality.
B) Reductions in income tax rates probably have had little impact on the distribution of income.
C) Reductions in income tax rates have created greater incentives for low-income individuals to work, save, and invest. As a result, reductions in federal income tax rates have led to less income inequality.
D) Reductions in income tax rates have been offset by increases in corporate income tax rates and payroll taxes. As a result, greater income inequality in the 1990s has been followed by a more equal distribution of income since 2001.
B
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In the United States for the year 2012, the federal government had a ________ so the national debt was ________
A) budget deficit; increasing B) budget surplus; increasing C) budget surplus; decreasing D) balanced budget; not changing E) budget deficit; decreasing
If the government increases taxes while holding expenditures constant,
A) the bond supply curve will shift to the left and the equilibrium interest rate will fall. B) the bond supply curve will shift to the right and the real interest rate will fall. C) government borrowing will be increased. D) the government's deficit will increase.
A rational decisionmaker takes an action if and only if
a. the marginal benefit of the action exceeds the marginal cost of the action. b. the marginal cost of the action exceeds the marginal benefit of the action. c. the marginal cost of the action is zero. d. the opportunity cost of the action is zero.
How might the input market for capital affect the labor market?
a. Workers might be replaced by machines if capital costs are lower than wages. b. As the cost of capital rises, owners are more willing to increase the supply. c. Demand for capital rises as the supply of labor moves toward equilibrium. d. When equipment is new, workers usually do not help to increase profits.