With a negative income tax providing a minimum of $20,000 and a tax rate of 25 percent, what amount of supplement would the government pay to a household earning $10,000?
a. $5,000
b. $10,000
c. $17,500
d. $20,000
c
You might also like to view...
"As long as supply-side effects are ignored, the balanced budget multiplier is equal to zero." Is the previous statement correct or incorrect? Define the balanced budget multiplier and then explain your answer
What will be an ideal response?
Firms use incentives to pursue their most fundamental goal, which is to maximize
A) profits. B) sales revenue. C) worker satisfaction. D) worker pay.
Long time lags hamper the effectiveness of economic policy because: a. people don't want to wait for economic recovery
b. the longer unemployment lasts, the more intense inflation becomes. c. by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the economic situation even worse. d. if inflation is allowed to continue for too long, it becomes immune to policy interference. e. if unemployment is allowed to continue for too long, it becomes immune to policy interference.
Which of the following would reflect the transactions demand for money?
A. Keeping funds in your savings account because the interest rate looks relatively attractive B. Selling common stocks you own and increasing the money in your savings account because you think stock prices will fall soon C. Keeping funds in your checking account to pay your rent D. Buying a U.S. Treasury security using funds from your checking account