The value of the spending multiplier decreases when
A) tax rates are reduced
B) exports decline
C) imports decline
D) government spending increases
E) the MPS increases
Ans: E) the MPS increases
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In addition to tax payments, the two other primary costs that a tax system inevitably imposes on taxpayers are
a. deadweight losses and administrative burdens. b. deadweight losses and frustration with the political system. c. administrative burdens and tax-preparation costs. d. administrative burdens and the risk of punishment for failure to comply with tax laws.
When decisions are made by majority rule, elected officials have a strong incentive to
What will be an ideal response?
An inverse relationship exists when:
A. there is no association between two variables. B. one variable increases and there is no change in the other variable. C. one variable increases and the other variable increases. D. one variable increases and the other variable decreases.
What do economists mean when they say that "there is no such thing as a free lunch?"
What will be an ideal response?