Business cycles all display the following characteristics except
A) a period of expansion followed by one of contraction.
B) comovement of many economic variables.
C) rising prices during an expansion and falling prices during the contraction.
D) they last a period of one to twelve years.
C
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One argument advanced in favor of not increasing the income tax on individuals with high income is that
A) increasing income tax increases wealth which contributes to increases in GDP. B) increasing the income tax on these individuals will reduce economic efficiency. C) not increasing income taxes will discourage corporations from increasing investment. D) increasing the income tax affects mostly middle-income and low-income individuals who are already paying heavy income taxes.
OPEC is an example of a producer's cartel that is successful because of its ability to institute tariffs on oil exports.
a. true b. false
An example of a negative externality is the:
A. cost you bear when your neighbor has a noisy party and does not compensate you for your discomfort. B. decrease in income to farmers that results from a drought. C. benefit you receive without paying when your neighbor installs a smoke detector. D. decrease in your real income that results when photographic equipment you purchase increases in price because of increased demand by others for these items.
Horizontal equity holds that
A. those with equal ability to pay should bear unequal tax burdens. B. those who benefit the most from government services should have the greatest voice in determining what gets produced. C. those with equal ability to pay should bear equal tax burdens. D. those who benefit the most from government services should bear the higher tax burden.