Refer to Figure 27-4. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by Congress and the president?
A) an increase in the marginal income tax rate
B) an open market purchase of Treasury bills
C) an increase in interest rates
D) an increase in transfer payments
A
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If the exchange rate rises, the quantity of dollars supplied
A) decreases, and there is movement down along the supply curve. B) increases, and there is movement up along the supply curve of dollars. C) increases with movement down along the supply curve. D) does not change. E) increases, and there is movement down along the supply curve.
Money spent on lobbying to eliminate the estate tax is not a cost of the tax system
a. True b. False
The authors provide an example that illustrates the calculation of the present discounted value for the lost wages from a deceased worker, and one component in this calculation is the worker's annual mortality rate (m)
Suppose we conduct this computation in two different ways --- one calculation assumes m is constant for all future periods, and the other calculation allows m to decline over time due to improvements in medical technology. Which estimated PDV will be larger? A) The PDV with constant m will be larger B) The PDV with variable m will be larger C) The two PDV's will be equal D) The answer to this question depends on the assumed interest rate
A tax dollar collected from an individual or a business costs the private economy more than a dollar because
a. the administration and enforcement of the tax system is costly. b. record keeping and the other elements of compliance cost are sizable. c. the taxes will eliminate some productive exchanges (and cause people to undertake some counterproductive activities). d. All of the above are correct.