Briefly explain why the federal income tax is considered a progressive tax.
What will be an ideal response?
The federal income tax is considered a progressive tax because as people earn more income, the percentage of their income that they must pay in taxes increases. As a result, the absolute amount of taxes they pay also increases. Higher earners face a higher tax burden under this progressive system.
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Over short time periods, deficits can help the economy cope with shocks
Indicate whether the statement is true or false
Which of the following is most likely a topic of discussion in macroeconomics?
A. an increase in the price of a hamburger B. a decrease in the production of DVD players by a consumer electronics company C. an increase in the wage rate paid to automobile workers D. a decrease in the unemployment rate
Which of the following is considered a potential solution to some regulatory capture?
A. Bringing industry experts into the regulatory process. B. Creating a standard set of regulations for all industries. C. Deregulation of the industry. D. Government subsidies for firms in the industry.
Surplus is:
A. maximized for individuals whose reservation price equals the market price. B. a measure of the value that buyers and sellers get from participating in a market C. negative for those who do not participate in a market. D. All of these are true.