With a negative income tax featuring an $8,000 minimum level of income and a 20% tax rate, a household earning zero dollars would receive a subsidy of:
a. zero
b. $1,600
c. $6,400
d. $8,000
d
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If a tax is placed on one good and not another, the effect that causes you to buy less of the taxed good because it has become relatively more expensive is called the
A. domino effect. B. substitution effect. C. net effect. D. income effect.
Refer to Figure 18-9 to answer the following questions
a. Did the distribution of income become more equal in 2016 that it was in 2015, or did it become less equal? Explain. b. If area A = 1,600, area B = 200, and area C = 3,200, calculate the Gini coefficient for 2015 and the Gini coefficient for 2016.
If the MRP of labor is below the wage rate, the firm should lay off workers
a. True b. False Indicate whether the statement is true or false
If the CPI was 125 this year and 120 last year, then
a. the cost of the CPI basket of goods and services increased by 4.2 percent this year. b. the price level increased by 4.2 percent this year. c. the inflation rate for this year was 4.2 percent. d. All of the above are correct.