Since there are many special interests lobbying in favor of different tax changes but no special interests lobbying in favor of the public interest, this suggests that tax code changes will _____
a. lead towards more regressive taxation
b. will favor special interests
c. not be in the direction of efficiency
d. b and c
d
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Potential GDP is also referred to as
A) full-employment GDP. B) politico-economic GDP. C) realized GDP. D) balanced-budget GDP.
The domestic real interest rate in a small open economy is
A) determined by the intersection of the supply curve and demand curve for loanable funds in the country. B) equal to the world real interest rate. C) the same as its nominal interest rate. D) determined by the total value of net exports in the country.
Comparative advantage is the ability of a country to produce a good at a higher opportunity cost relative to other countries
Indicate whether the statement is true or false
Suppose that the EPA has proposed strict controls on the amount of sulfur that diesel fuel contains. These controls were designed to fully offset the cost of pollution generated by diesel fuel vehicles. The effect of the regulation is estimated to increase the equilibrium price of a gallon of diesel fuel by 10 cents. Assuming that the supply of diesel fuel has a positive slope and demand has a negative slope, one can infer that the EPA determined that:
A. the external cost of using diesel fuel is greater than 10 cents. B. the external cost of using diesel fuel is less than 10 cents. C. the external benefit of using diesel fuel is less than 10 cents. D. the external cost of using diesel fuel is equal to 10 cents.