The Center County Council voted to increase taxes dramatically on all automobiles sold in the county to raise revenue to repair roads. After a year, they were disappointed to learn that tax revenue had not really increased with the new tax. What could explain this?
a. The tax needed to be even larger in order to generate revenue.
b. The tax greatly reduced the quantity of cars sold.
c. The tax made demand grow too fast for producers to match.
d. The tax gave the surplus to consumers instead of the government.
b. The tax greatly reduced the quantity of cars sold.
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In a zero-sum game
a. all players receive a $0 payoff b. all players can simultaneously win c. the gains to the winners equal the losses of the losers d. none of the above
$2.98 is an example of
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What did Friedman and Phelps predict would happen if policymakers tried to move the economy upward along the Phillips curve? Did the behavior of the economy in the late 1960s and the 1970s prove them wrong?