Briefly describe why some economists prefer a value-added tax (VAT) to an income tax
Some economists believe that taxing consumption through a VAT would avoid the disincentives to savings created by our current U.S. income tax system.
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A consequence of hyperinflation is that people
A) increase the quantity of money demanded. B) receive higher real wage hikes, which increases their purchasing power for goods and services. C) who make fixed-payment loans to others receive higher payments as inflation increases. D) spend time trying to keep their money holdings near zero. E) want to lend funds because interest rates are so high.
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Which of the following gives the price of cereal in terms of the price of milk?
A. Pc = 100 - (Pm/10) B. Pc = 8 - (Pm/10) C. Pc = 10 - (Pm/10) D. Pc = 10 + (Pm/10)
Ownership in a government bureau is transferable
Indicate whether the statement is true or false
MNEs are attracted to regional trading groups because of their large market sizes and production locations, and because they ________.
A) are good sources for raw materials B) implement trade restrictions C) offer both internal and external tariffs D) have very little competition