Unlike the minimum wage, the Earned Income Tax Credit does not:
A. cost the government money.
B. cause low-wage workers to be laid off.
C. increase total economic surplus.
D. improve the economic well-being of the working poor.
Answer: B
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When the financial crisis started in August 2007, inflation was rising and the Fed began an aggressive easing lowering of the federal funds rate, which indicated that
A) the Fed pursued an autonomous monetary policy tightening. B) the Fed pursued an autonomous monetary policy easing. C) the Fed had an automatic negative response to inflation based on the Taylor rule. D) the Fed had an automatic positive response to inflation based on the Taylor rule.
Winner's curse is likely to happen in which of the following auctions?
A) unexplored oil reserves B) corn stored in a warehouse C) 1,000 ton of iron ore D) U.S. Treasury Bonds
In the price system
A) prices are set by government action. B) consumers alone set the price. C) producers alone set the price. D) prices are set by the interaction of supply and demand.
Which of the following will shift the aggregate demand curve to the right, ceteris paribus?
A) an increase in interest rates B) a decrease in disposable income C) a decrease in expected profits for firms D) an increase in net exports