Which of the following government entities relies most heavily on sales taxes?
a. local government
b. state government
c. federal government
d. the Social Security Administration
b
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When economists speak of preferences as influencing demand, they are referring to
A) directly observable changes in prices and income. B) an individual's attitudes toward goods and services. C) the excess of wants over the available supplies. D) the availability of a good to all income classes.
If fractional reserve banking exists, then:
A. banks need only keep a portion of each deposit on hand. B. the money multiplier is equal to 1. C. money cannot be created in the economy through banks. D. lending would be curtailed to nearly zero.
When Iceland can generate a product using fewer labor hours and resources than the United States, an economist would say that Iceland had
a. a comparative advantage in production of the product. b. an absolute advantage in production of the product. c. a higher opportunity cost of producing the product. d. no incentive to import the product, regardless of the cost-price conditions for other products.
The marginal social cost curve lies below the marginal private cost curve, with the vertical difference between the two curves representing the marginal external cost
Indicate whether the statement is true or false