An advantage of a consumption tax over the present tax system is that a consumption tax
a. raises more revenues.
b. would save the government millions in administrative costs.
c. places more of the tax burden on the wealthy.
d. does not discourage saving.
d
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Refer to Figure 7.1. Start from initial equilibrium. If firms reduce their capital stock, the new real wage could be ________ and the new amount of labor employed could be ________
A) X; C B) X; A C) Z; C D) Y; C
A French citizen lives in Detroit, but works in Windsor, Canada; his income is counted in U.S. GDP
Indicate whether the statement is true or false
The term opportunity cost refers to
A. The minimum price that a producer will accept for a product. B. The most a consumer is willing to exchange to get an item. C. The slope of the demand line for a consumer or slope of the supply line for the producer. D. All of the choices are correct.
Assume that Brenda has positive wealth. As the interest rate decreased, Brenda reduced her current consumption. For Brenda
A. the substitution effect of an interest rate decrease outweighs the income effect. B. the substitution effect of an interest rate increase must be zero. C. the income effect of an interest rate decrease outweighs the substitution effect. D. the income effect of an interest rate decrease must equal the substitution effect.