The U.S. tax code allows taxpayers to deduct the value of charitable contributions from their taxable income
Explain if this is an example of an incentive, and what effect this policy is likely to have on the amount of charitable contributions in the United States.
This is an example of an incentive because it is an inducement to give to charitable organizations. This is likely to increase the amount of charitable contributions compared to what they would be without this tax deduction.
You might also like to view...
According to economists Robert Lucas and Thomas Sargent, the apparent short-run trade-off between unemployment and inflation in the 1950s and 1960s was the result of
A) unexpected changes in fiscal policy. B) unexpected changes in monetary policy. C) expected changes in monetary policy. D) expected changes in fiscal policy.
The monetary rule is the view of the:
a. Keynesians that monetary policy is most important. b. Monetarists that monetary policy is most important. c. Classical economists that monetary policy is most important. d. Monetarists that the Fed should expand the money supply at a constant rate.
Investment in both physical and human capital enhances economic growth because it:
a. increases consumption during the current period. b. makes it possible for individuals to produce more goods and services per hour worked. c. encourages firms to expand output by employing more low-productivity workers. d. encourages workers to unionize and, thereby, fight for higher wages.
When a state road has a pothole, the state department of transportation is responsible for filling it. When a local road has a pothole, the town is responsible for filling it. Either way, the money ultimately comes from the taxpayers. This is an example of how government at different levels:
a. cannot agree on areas of responsibility. b. prevents markets from being profitable. c. pays for public goods. d. allows free riders to take advantage.