Jose earns $160,000 per year and Jackie earns $80,000 per year. They both pay the same price to buy an identical SUV and each pays $1,500 in sales tax. In relation to their relative incomes, this is an example of a
A. regressive tax.
B. proportional tax.
C. progressive tax.
D. marginal tax.
Answer: A
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Pollution is a by-product of some production processes, so on this count real GDP as measured
A) is adjusted downward to take into account the pollution. B) is adjusted upward to take into account the expenditures that will be made in the future to clean up the pollution. C) tends to overstate economic welfare. D) tends to understate economic welfare.
Refer to Table 2-16. Estonia has a comparative advantage in the production of
A) cell phones. B) both products. C) lumber. D) neither product.
What is the money multiplier?
a) A measure of the potential or maximum amount the money supply can increase when new deposits enter the system. b) A measure of the amount of excess reserves banks hold. c) A measure of the amount of total reserves banks hold. d) A measure of the maximum amount of savings that can happen when account holders deposit money in a bank account.
In the mid-1970s, the United States switched from running a trade ________ to running a trade ________.
A. deficit; surplus B. surplus; deficit C. balance; surplus D. deficit; balance