The term "fiscal policy" refers to
A. the use of tax changes to make the distribution of personal income more equitable.
B. changes in the levels of government spending and taxation for the purpose of stabilizing the economy.
C. changes in the level of government spending.
D. the use of taxes and transfer payments to make the distribution of after-tax income more equitable.
B. changes in the levels of government spending and taxation for the purpose of stabilizing the economy.
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The figure illustrates the market for bagels. If the number of bagels is increased from 20 to 30 an hour, consumer surplus plus producer surplus ________ and deadweight loss is ________
A) decreases; negative B) decreases; positive C) increases; positive D) increases; negative
Refer to Figure 5-10. What is the value of the net gain to society as a result of subsidizing chicken pox vaccinations?
A) value equal to the area of FEG B) (PE × QE) C) value equal to the area of QFFGQE D) (PF × QF)
The tax rate that maximizes the government's revenues is:
A. not always the level that is "best" for the economy. B. the level that is "best" for the economy. C. 30 percent. D. 85 percent.
Suppose that next year the government fixes the number of pollution permits at a quantity less than the number sold this year. If nothing else changes, next year the price of a pollution permit will be:
A. greater than the price of a permit this year. B. less than the price of a permit this year. C. equal to the price of a permit this year. D. equal to the price set by the government.