Vertical equity can be determined by comparing the
A. Marginal tax rate of the taxpayer with the highest nominal income to the marginal tax rates of taxpayers with lower nominal incomes.
B. Effective tax rate of the taxpayer with the highest nominal income to the effective tax rates of taxpayers with lower nominal incomes.
C. Effective tax rates for two taxpayers with the same nominal incomes.
D. Marginal tax rates for two taxpayers with the same nominal incomes.
Answer: B
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The reserve ratio is 10 percent. If the bank receives a customer deposit of $100,000, then an immediate effect is
A) a reduction in the bank's total assets of exactly $10,000. B) no change in the bank's total assets or total liabilities. C) a reduction in the bank's total liabilities of exactly $10,000. D) an increase in the bank's reserves of exactly $10,000.
A jar has 20 red jelly beans and 40 black jelly beans. If you pick a red jelly bean and put it back, what are the odds of picking a red jelly bean next?
A) 20/40 B) 20/60 C) 40/60 D) 0
The effectiveness of monetary policy as a stabilization tool is limited by
a. activist economists, who exert pressure on politicians. b. the inability to forecast the future and time policy changes in a stabilizing manner. c. Congressional attempts to offset changes in monetary policy with modifications in fiscal policy. d. the inability of the Federal Reserve to alter the money supply.
If a country's currency depreciates, which of the following will most likely happen?
a. Net exports will fall and aggregate demand will increase. b. Net exports will rise and aggregate demand will increase. c. Net exports will fall and aggregate demand will decrease. d. Net exports will rise and aggregate demand will decrease.