The sales tax is a regressive tax because the:
A. percentage of income paid as taxes is constant as income rises.
B. percentage of income paid as taxes falls as income rises.
C. tax tends to reduce the total volume of consumption expenditures.
D. administrative costs associated with the collection of the tax are relatively high.
Answer: B
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The national concentration ratio
A) underestimates concentration for both the newspaper and the automobile industries. B) overestimates concentration for both the newspaper and the automobile industries. C) underestimates concentration for the newspaper industry and overestimates it for the automobile industry. D) overestimates concentration for the newspaper industry and underestimates it for the automobile industry.
In the Solow growth model, from an initial steady state with fixed values of A, d, and n, an increase in the national saving rate causes the standard of living to
A) rise temporarily, and then fall back to its initial level. B) rise and then hold constant at a new higher level. C) grow at a slower rate temporarily, and then return to the initial growth rate. D) grow at a permanently faster rate. E) not change at all in the short run or the long run.
Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise
Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of: A) the ultimatim game. B) loss aversion. C) anchoring. D) none of the above
Which statement is true?
A. Income is fairly evenly distributed in the U.S. B. The richest 1% of our population has nearly 50% of the income. C. The percentage of Americans below the poverty line has been falling steadily (except for recession) since the 1950s. D. Eleven percent of the children under six living in a two parent home are poor.