Which of the following is not a finding of Cox and Alm regarding the gap between rich and poor?
a. The gap shrinks if taxes are taken into account.
b. The gap shrinks if consumption, rather than income, is compared.
c. The gap shrinks if the number of people in the household is taken into account.
d. The gap shrinks if the state of residence is taken into account.
d
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The production of an industrial good in a plant emits harmful gases that cause breathing difficulty. Which of the following will happen if the government imposes a Pigouvian tax on the plant?
A) Marginal external cost will increase. B) Marginal private cost will fall. C) The quantity supplied of the good will decrease. D) The demand for the good will increase.
Expenditure switching refers to
A) a switching back and forth between investment and consumption expenditures. B) a switching back and forth between domestic and foreign goods in response to changes in the exchange rate. C) a switching back and forth between domestic and foreign goods in response to changes in the interest rate. D) a switching of back and forth in the current account from a deficit to a surplus and vice versa. E) All of the above.
A decrease in consumer confidence will cause a:
A. shift in aggregate demand to the right. B. movement downward along the aggregate demand curve. C. shift in aggregate demand to the left. D. movement upward along the aggregate demand curve.
An increase in household saving causes consumption to
a. rise and aggregate demand to increase. b. rise and aggregate demand to decrease. c. fall and aggregate demand to increase. d. fall and aggregate demand to decrease.