The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. The mayor will be able to successfully divide the burden of the tax equally if the
a. demand for labor is more elastic than the supply of labor.
b. supply of labor is more elastic than the demand for labor.
c. demand for labor and supply of labor are equally elastic.
d. It is not possible for the tax burden to fall equally on firms and workers.
c
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If the spending multiplier is equal to 5, then a $1 initial increase in investment spending will lead to a:
a. 5 percent decrease in real GDP. b. 5 percent increase in real GDP. c. $5 decrease in real GDP. d. $5 increase in real GDP. e. 0.05 percent increase in real GDP.
Asymmetric information exists when
A) both parties to an exchange have all relevant facts about that exchange. B) a good that is either nonrivalrous or nonexcludable is being sold on a market. C) the two parties to an exchange differ in what they know about the good being exchanged. D) neither party to an exchange is knowledgeable about the quality of the good being exchanged.
Over the two-year period during which the financial crisis occurred, the amount of assets in the Federal Reserve balance sheet increased by:
A. 6 times. B. 3 times. C. 4.5 times. D. 2.5 times.
The General Agreement on Tariffs and Trade focused on:
a. raising tariffs on agricultural products. b. lowering trade restrictions between countries. c. promoting full employment worldwide. d. increasing trade restrictions between countries.