Inflation is best described as a situation in which
A) relative prices are changing.
B) some prices are rising faster than others.
C) relative prices are changing, but the purchasing power of the dollar is unchanged.
D) the average of all prices are on a sustained rise over a period of time.
D
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In contrast to the need for legal enforcement under a system of direct controls, a taxes approach
A. is subject to greater uncertainty of payment of fees. B. makes taxes automatic and certain. C. speeds the prosecution and conviction process. D. does not actually reduce pollution, merely the cost of monitoring it.
If tax rates are cut, one might expect to observe an increase in the budget deficit. Supply-siders question this observation, arguing that
A. this is a price that must be paid for a more equitable tax system. B. when taxes are cut, expenditures must also be cut. C. a decrease in the tax rate may actually generate an increase in tax revenues. D. tax wedges will make up the difference.
The starting point of many methods for predicting equilibrium strategy in sequential games is
a. designing proactive reactions to rival actions b. information sets c. uncertain outcomes d. backwards induction based on an explicit order of play e. endgame analysis
Primarily markets, not politics, determine the level of "merit goods" provision
Indicate whether the statement is true or false