What are the advantages and disadvantages to the value-added tax (VAT)?
What will be an ideal response?
The value-added tax would operate as a national sales tax. The major attraction of this tax from an economic perspective is that it penalizes consumption and thus would encourage savings and investment. Adopting such a tax might increase the return on working or investing because income earners would have more control over the allocation of their wages or salaries. Critics contend that the value-added tax actually makes consumption more expensive, and thus reduces future rewards for working. The tax also tends to be hidden in all the goods and services on which it is levied, and thus it might be easier to increase this type of tax than would be the case with the income tax. The value-added tax also is a regressive tax.
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Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is ________ because of the ________
A) 2000-2010; 2008/2009 deep recession B) 1930-1940; Great Depression C) 2010-2020; Keynesian economic policies being used more frequently than in the 1930s D) 1990-2000; fear of Y2K E) 2000-2010; the war on terror
A family on a trip budgets $800 for restaurant meals and fast food. The price of a fast-food meal is $20 and the family can afford 16 restaurant meals if they don't buy any fast food. How many fast-food meals would the family gain if they gave up one restaurant meal?
a. 1 b. 0.4 c. 2 d. 2.5 e. 5
An increase in the number of buyers in the market for LED TVs would cause the market demand curve for LED TVs to:
A) shift right. B) shift left. C) stay the same because market demand doesn't depend on the number of buyers. D) shift left or right depending on whether the new buyers purchase more or less than existing customers at each price.
Which of the following pairs of goods would be considered complementary?
a. Coca-Cola and Pepsi b. computers and computer software c. radios and televisions d. mass transit and private automobiles e. compact discs and cassette tapes