In the U.S., people are required to pay taxes on
a. nominal interest earnings, irrespective of their real interest earnings.
b. real interest earnings, irrespective of their nominal interest earnings.
c. real capital gains, irrespective of their nominal capital gains.
d. All of the above are correct.
a
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Suppose a price ceiling is imposed below the undistorted market equilibrium price. Which of the following is true?
A. The increase in the real price paid by consumers is larger the more price inelastic consumer demand is. B. The increase in the real price paid by consumers is larger the more price inelastic the supply curve is. C. The size of the reduction in market output depends only on the price elasticity of supply and not the price elasticity of demand. D. Both (a) and (b). E. Both (a) and (c). F. Both (b) and (c). G. All of the above. H. None of the above.
Since Germany is a large open economy, the increase in German borrowing and investment in what was formerly East Germany in the early 1990s resulted in
A) a decline in the world real interest rate. B) a shift to the right in the German supply of loanable funds curve. C) an increase in the real interest rate in the United States. D) a shift to the left in the German demand for loanable funds curve.
Explain how each of the following factors would influence aggregate demand in the United States. Be sure to explain which component of aggregate demand would be affected
a. a stock market crash b. an increase in the personal income tax rate c. a decrease in the real interest rate d. an increase in government purchases e. a decline in income in Canada
People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information. B. public information. C. a negative externality. D. a community rating.