A 7.25 percent sales tax
A. Is a regressive tax because poor individuals consume a higher percentage of their income than high-income individuals.
B. Does not impose an additional tax burden on most individuals because the sales tax is paid entirely by the seller.
C. Is a progressive tax because high-income individuals buy more goods and services than low-income individuals.
D. Is a proportional tax because the rate is the same for all income groups.
Answer: A
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The use of pollution permits by the government to reduce pollution is:
A. common in several parts of the United States. B. theoretically interesting, but untried in the United States. C. common in the third world. D. workable in theory but unworkable in practice.
Actual real GDP will be above potential GDP if
A) inflation is rising. B) firms are producing below capacity. C) firms are producing at capacity. D) firms are producing above capacity.
In the long-run the ISLM model predicts that ________ can change real output
A) only monetary policy B) only fiscal policy C) both monetary and fiscal policy D) neither monetary nor fiscal policy
If output grows faster than the population, the average standard of living will
a. rise b. fall c. remain the same d. stagnate e. rise and then fall