If the price of inputs rises and personal income taxes rise:
a. Price index falls, and real GDP rises.
b. Price index falls, and real GDP falls.
c. Price index falls, and the change in real GDP is uncertain.
d. The change in price index is uncertain, and real GDP rises.
e. The change in price index is uncertain, and real GDP falls.
.E
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If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good
Indicate whether the statement is true or false
Suppose you paid $500,000 for an asset. You hold the asset for five years. The interest rate that you get for the asset is 10%. Assume the tax rate on capital gains is 20%.
(A) If capital gains are taxed only when the asset is realized, how much will you have earned on the asset? (B) Suppose that capital gains are taxed annually instead of at realization. How much will you have earned on the asset? (C) How big is the difference in the two taxing schemes?
How does the deadweight loss occur in a deficiency payment program?
Many people assert that the national debt is not a problem because "we owe it to ourselves." Is this true?