You hear a candidate for the U.S. Congress state that a tax on stocks is an equitable way for the government to raise revenue because it only affects the very wealthy. Evaluate this statement
Although the very wealthy do hold most of the shares of stock, and so would be hit harder by the tax than
the poorer segment of the population, it is inaccurate to say that such a tax would only affect the very
wealthy. Approximately 26 percent of Americans directly owned stocks in 1992, including people in all
income brackets. Additionally, many more people own stock indirectly through pension plans, life
insurance policies, and other financial intermediaries.
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For two individuals who engage in the same two productive activities, it is impossible for one of the two individuals to
a. have a comparative advantage in both activities. b. have an absolute advantage in both activities. c. be more productive per unit of time in both activities. d. gain from trade with each other.
Which of the following is true of the life-expectancy rates observed across the world economies in 2007?
a. Life expectancy at birth averaged 72 years in sub-Saharan Africa. b. Life expectancy at birth averaged 80 years in high-income economies. c. Life expectancy at birth averaged 52 years in middle-income economies. d. Life expectancy at birth averaged 69 years in all low-income economies.
What is one of the benefits of FDIC insurance?
a. Banks are more likely to manage their money carefully. b. It provides banks with an attractive place to invest their reserves. c. It drives down the interest rate. d. Banks are more stable, so the money supply is more stable.
A firm's revenue is price per unit times the quantity sold, so an increase in price decreases revenue if demand is elastic.
a. true b. false