An optimal corrective tax _____
a. falls as quantity produced increases
b. is above the marginal external product
c. is a lump sum tax
d. helps to increase demand for the taxed product
d
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Secular deflation
A) has been a serious problem during the last three decades in the United States. B) although present, has not been a problem during the last three decades in the United States. C) has not been present in the United States since 1959. D) cannot exist in a capitalistic economy.
A paper mill discovers that burning old tires is a cheaper way to get power rather than using coal, and they adopt the new technology. Which of the following will likely happen in the market for paper?
A. The demand for paper will increase. B. The supply of paper will increase. C. The supplyfor paper will remain constant. D. The supply for paper will decrease.
Suppose Smith pays $100 to Jones.
a) We can say with certainty that the GDP has increased by $100. b) We can say with certainty that the GDP has increased, but we cannot determine the amount. c) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. d) We need more information to determine whether GDP has changed.
Why do national income accountants include indirect business taxes in the income approach to GDP computation?
A. Indirect business taxes are the allowances for the portion of capital worn out by producing GDP. B. Indirect business taxes are part of firms' profits. C. Indirect taxes are income payments to suppliers of resources. D. Indirect business taxes are income for the government received through collection by firms.