Suppose you are making $50,000 per year and paying $5,000 per year in income taxes. You get a $10,000 per year raise and your income taxes are now $6,500 per year. Based on this information, the income tax system is
A) proportional.
B) progressive.
C) regressive.
D) bracketed.
Answer: B
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Consider a closed economy without a government and without international trade. What will be TRUE when this economy is in equilibrium?
A) Planned real consumption spending equals real GDP. B) Total planned real investment spending will exceed total planned real expenditures. C) Planned real consumption spending plus planned real investment spending equals real GDP. D) Planned real investment spending will exceed real planned saving.
What determines the income flows that households receive?
A) an agency of the Federal government B) what they choose to produce, how much is sold, and the price received when sold C) their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold D) financial institutions such as banks E) what they choose to consume
In any year, real GDP
A) must always be less than potential GDP. B) might be greater or less than potential GDP. C) will always be greater than potential GDP because of the tendency of nations to incur inflation. D) always equals potential GDP.
Refer to Figure 16-5. Suppose the firm represented in the diagram decides to practice perfect price discrimination. What is the profit-maximizing quantity?
A) 320 units B) 480 units C) 560 units D) 640 units