The idea of two individuals being equally well off in the absence and existence of taxation is
A. time consistency of optimal taxation.
B. flat tax income schedule.
C. benefits received principle.
D. utility definition of horizontal equity.
D. utility definition of horizontal equity.
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Your roommate is having trouble grasping how monetary policy works. Which of the following explanations could you use to correctly describe the mechanism by which the Fed can affect the economy through monetary policy? Increasing the money supply
A) lowers the interest rate, raises the value of the dollar, lowers the prices of exports, and raises net exports. B) raises the interest rate and consumers decrease spending on durable goods. C) causes people to spend more because they know prices will rise in the future. D) lowers the interest rate, and firms increase investment spending.
Compared with a perfectly competitive market with similar cost conditions, a monopolist will have:
a. a higher output and a lower price. b. a lower output and a lower price. c. a higher output and a lower price. d. a lower output and a higher price. e. equal output and a higher price.
In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold
a. True b. False Indicate whether the statement is true or false
Which of the following is necessary for an economy to self-adjust fairly quickly, according to classical economists?
a) The use of monetary policy b) A high unemployment rate c) The use of fiscal policy d) Flexible wages and prices