A negative income tax does not
A. increase work incentives for those who receive cash payments.
B. increase work incentives for those who do not receive cash payments.
C. affect incentives for the poor but affects incentives for low earners who are not poor.
D. affect incentives, which is why it is efficient.
Answer: B
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Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $9, what changes in the market would result in an economically efficient output?
A) The price would decrease, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would decrease. C) The price would decrease, the quantity supplied would decrease, and the quantity demanded would increase. D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.
Inflation targeting is a framework for carrying out monetary policy whereby
A) the central bank commits to a monetary growth rule. B) the central bank commits to achieving a publicly announced level of inflation. C) the central bank commits to achieving a target level of inflation which is never announced publicly. D) the central bank adopts a rigid target for inflation and ignores declines in output.
Demand for items people do not really need for their survival, such as cars, is generally ________ than demand for items such as water.
A. higher B. lower C. more elastic D. less elastic
Which of the following is NOT an important source of revenue for the federal government?
A) individual income taxes B) property taxes C) social insurance taxes and contributions D) corporate income taxes