A government proposal to increase marginal tax rates on the wealthiest 2 percent of U.S. residents is supposed to generate an additional $100 billion in tax revenues. It is likely that
A) the actual revenue raised will exceed the $100 billion, because the other 98 percent of the population will increase their work effort with a more fair tax system.
B) the actual revenue raised will be more than $100 billion, because the short-run aggregate supply curve is upward sloping.
C) the actual revenue raised will be close to $100 billion, because the wealthy don't respond to work incentives the way poorer workers do.
D) the actual revenue raised will be less than $100 billion, because some of the people will respond by working less and earning less income that can be taxed.
D
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A major difference between tax systems in developing and developed country is that
a. developing countries rely on direct taxes, and developed countries rely on indirect taxes b. developing countries rely on indirect taxes and developed countries rely on direct taxes c. developing countries rely on domestic taxes and developed countries rely on taxes on foreign trade d. developing countries rely on ‘forced saving' and developed countries tax saving directly e. there are no significant differences
If you expect the inflation rate to be 4 percent next year and a one year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is
A) -3 percent. B) -2 percent. C) 3 percent. D) 7 percent.
The time it takes for a new policy to register its full impact on the economy after it has been put in force is known as the_____
a. activity lag b. decision-making lag c. effectiveness lag d. implementation lag e. recognition lag
If a firm competing in a price-taker market seeks to maximize profit, the firm should
a. increase output whenever marginal cost is less than average total cost. b. increase output whenever marginal revenue is less than marginal cost. c. choose the output where per-unit profit is greatest. d. increase output whenever price exceeds marginal cost.