A negative income tax system would
a. make taxes more regressive.
b. sever the link between tax policy and income distribution.
c. collect from high-income households and give transfers to low-income households.
d. eliminate progressive tax rates.
c
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Deflation is defined as a situation in which
A) the rate of inflation is below 2 percent. B) the average of all prices of goods and services in an economy is falling. C) the value of the dollar is rising relative to other currencies. D) the Gross Domestic Product's growth rate is less for a given quarter than it was for the prior quarter.
The Fed can reduce the federal funds rate by
a. decreasing the money supply. To decrease the money supply it could sell bonds. b. decreasing the money supply. To decrease the money supply it could buy bonds. c. increasing the money supply. To increase the money supply it could sell bonds. d. increasing the money supply. To increase the money supply it could buy bonds.
The hourly minimum wage rate in the U.S. is now ___________.
Fill in the blank(s) with the appropriate word(s).
Answer the following statements true (T) or false (F)
1) The marginal propensity to consume is the ratio of consumption to saving. 2) If people saved more of any extra income that they receive, then the consumption schedule will become flatter. 3) If the consumption schedule becomes steeper, then the saving schedule will become steeper also. 4) If households see the value of their financial assets increase significantly, then the saving schedule will shift upward. 5) The wealth effect will tend to decrease consumption and increase saving.