Throughout this discussion of taxes, there has been repeated mention of the need for progressivity in the tax system. Why is this an important goal for tax systems in most societies?
What will be an ideal response?
Society generally desires a system that says that an individual's average tax rate should
increase with income.
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In the above figure, if a Medicare subsidy that had previously been paid by the government has now been eliminated, the result will be
A) an increase in the price received by producers, from P0 to Ps. B) a decrease in the price received by producers, from Ps to P0. C) an increase in the price paid by consumers, from P0 to Ps. D) a decrease in the price paid by consumers, from Ps to P0.
The Keynesian range of the aggregate supply curve is the portion where:
a. The average price level and real GDP do not change with movements in aggregate demand. b. Real GDP does not change with movements of aggregate demand, but the average price level does change. c. The average price level does not change with movements of aggregate demand, but real GDP does. d. The average price level and real GDP change with movements in aggregate demand.
Given the prevalence of electronic payment mechanisms like credit cards and debit cards and the safety of checks, why is the amount of currency in the hands of the public increasing?
What will be an ideal response?
Relative to a market with perfect information, in a market with imperfect information:
A. some goods will be sold in small quantities or not at all. B. more than the equilibrium quantity of goods will be sold. C. the equilibrium quantity will be sold, but at a price higher than the equilibrium price. D. the equilibrium quantity will be sold for the equilibrium price.