Which of the following situations is a clear application of the benefits principle of taxation?
a. wealthier people are taxed more heavily
b. heavier vehicles are charged higher tolls on turnpikes
c. state government providing a free education to any child in the state
d. sales of measles vaccine exempt from sales tax
b
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Attempts to fine-tune the economy through counter-cyclical monetary policy
A) demonstrated their effectiveness in the 1930s. B) demonstrated their effectiveness during World War II. C) demonstrated their effectiveness between 1945 and 1960. D) have not yet demonstrated their effectiveness.
According to the monetarist transmission mechanism, a decrease in the supply of money will result in
A) individuals initially holding excess bonds. B) individuals initially holding excess money. C) a leftward shift in the aggregate demand curve. D) a and c
Because government bodies have the power to make up for inadequate supply of a good:
A. it can be efficiency enhancing in markets for public goods. B. they have incentive to compete with local businesses. C. its presence as a producer is in virtually every market. D. None of these statements is true.
Suppose that white workers are getting paid $21/hour, while similarly-productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will:
A. Hire African-Americans only if their wage rate falls to $3/hour B. Hire African-American workers C. Not hire African-Americans at all, even if they offer to work for free D. Not hire African-Americans, unless they work for free