Taxes distort economic behavior because they
A. cause deviations in economic behavior from the efficient, free-market outcome.
B. change the composition of income and spending.
C. change the composition of consumption, investment, government spending, and net exports.
D. change the balance between private and public expenditures.
Answer: A
You might also like to view...
Government-created price floors are typically imposed to
a. help consumers b. help producers c. raise tax revenue d. shift the supply curve to the left e. shift the demand curve to the right
Expansionary fiscal policy can cause a rise in real GDP in combination with
a. an increase in the price level. b. a decrease in the price level. c. no change in the price level. d. a decrease in the price level if the aggregate supply curve is upward sloping.
A U.S. trade policy that restricts the sale of foreign goods in the U.S. market will
a. reduce the demand for U.S. export goods since foreigners will be less able to buy our goods if they cannot sell to us. b. benefit producers in industries that export goods. c. increase the nation's income since it protects domestic jobs. d. enhance economic efficiency by allocating more resources to the areas of their greatest comparative advantage.
How is marginal revenue product reflected in “winner-take-all” markets such as in the music industry?
What will be an ideal response?