Kim is paid $50,000 per year, and pays an annual income tax of 10 percent. Due to an inflation rate of 10 percent, her pay increases to $55,000, which puts her in a higher tax bracket where she must pay 20 percent. Kim has experienced:
A. bracket costs.
B. the deflationary cost of tax distortion.
C. an increase in her purchasing power.
D. the inflationary cost of tax distortion.
D. the inflationary cost of tax distortion.
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In the above figure, Reggie's budget line rotates outward from BL1 to BL2. He initially consumes at point A. If his new consumption bundle is at point C, this implies that his demand curve for kiwi fruit
A) has shifted. B) is a vertical line. C) slopes downward. D) is a horizontal line.
To have more consumer goods in the future, we must
A) produce more capital goods today. B) lower current income. C) get government involved in the production process. D) stop producing all goods today.
Economists usually use the term "recession" to refer to:
a. any slowdown in the growth of real GDP. b. zero real GDP growth. c. two or more consecutive quarters of declining real GDP. d. a reduction in nominal GDP lasting more than six months.
If net exports fall, what actions could a central bank take to stabilize the economy?