Proportional income taxation is distorting because
A) people do all they can to avoid paying taxes.
B) the competitive equilibrium is not Pareto optimal.
C) firms do all they can to avoid paying taxes.
D) the government budget constraint does not hold.
B
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If an economy is producing a level of output that is on its production possibilities curve, the economy
A) has idle resources. B) has idle resources but is using resources efficiently. C) has no idle resources but is using them inefficiently. D) has no idle resources and is using resources efficiently.
In Figure 26.1, the price under perfect competition is 
A. P1. B. A. C. P2. D. F.
Which of the following revenue-raising options did the "colonial" government select to secure the resources needed to revolt?
(a) Printing money and borrowing from other countries (b) Printing money and confiscating property (c) Taxing and borrowing from other countries (d) Taxing and reducing non-military government spending
An increase in national saving reduces the interest rate and so reduces net capital outflow
a. True b. False Indicate whether the statement is true or false