The current U.S. income tax system requires taxpayers to pay a higher marginal tax rate on higher levels of taxable income. Suppose that the tax rate is 10 percent on the first $15,000 of taxable income, 15 percent on the next $45,000 of taxable income, 30 percent on the next $60,000 of taxable income, and 35 percent on taxable income above $120,000. Suppose the tax code also includes provisions that allow taxpayers to reduce the income on which they are taxed, and that those provisions most often apply to the richest taxpayers. These provisions tend to make the tax code:
A. more efficient.
B. more progressive.
C. less progressive.
D. less regressive.
Answer: C
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An expansion occurs when the level of real GDP is
A) increasing. B) decreasing. C) at a cyclical peak. D) at a cyclical trough.
Which of the following is true about the United States?
a. There has only been one recession in U.S. history. b. There have been recessions every couple of years throughout U.S. history. c. Recessions have never occurred in the United States. d. Recessions have occurred periodically in U.S. history. e. Recessions in the United States have generally been worse than in other countries.
In an economy, the value of inventories rose from $100 billion in 2014 to $150 billion in 2015. In calculating total investment for 2015 compared to 2014, national income accountants would:
A. increase it by $50 billion. B. increase it by $150 billion. C. decrease it by $50 billion. D. decrease it by $100 billion.
Which view of aggregate supply predicts that the outcomes of fiscal and monetary policy depend on how close the economy is to full employment?
A. The hybrid view. B. The monetarist view. C. The Keynesian view, the monetarist view, and the hybrid view. D. The Keynesian view.