The government imposes a tax on imported wine. As a result, fewer individuals purchase imported wine. This is an example of tax
A. incidence.
B. shifting.
C. equity.
D. evasion.
Answer: B
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Everything else held constant, if income tax rates were lowered, then
A) the interest rate on municipal bonds would fall. B) the interest rate on Treasury bonds would rise. C) the interest rate on municipal bonds would rise. D) the price of Treasury bonds would fall.
If the Fed was to use all of its three most common tools to increase the money supply, it would:
a. buy bonds, reduce the discount rate, and reduce reserve requirements. b. sell bonds, reduce the discount rate, and reduce reserve requirements. c. sell bonds, reduce the discount rate, and increase reserve requirements. d. sell bonds, increase the discount rate, and increase reserve requirements.
Refer to Exhibit 6-2. The labor force participation rate in year 3 is
a. 12 1/2 percent. b. 70 percent. c. 80 percent. d. 30 percent. e. 50 percent.
Expansionary fiscal policy actions include __________ government spending and/or __________ taxes, while contractionary fiscal policy actions include __________ government spending and/or __________ taxes
A) increasing; increasing; decreasing; decreasing B) decreasing; decreasing; increasing; increasing C) increasing; decreasing; increasing; decreasing D) decreasing; increasing; increasing; decreasing E) increasing; decreasing; decreasing; increasing