To set a tax rate at the appropriate level to maximize its tax revenues, a government must engage in
A. debt-free tax analysis.
B. static tax analysis.
C. ad valorem tax analysis.
D. dynamic tax analysis.
Answer: D
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The change illustrated in the figure above can be the result of the Fed ________ government securities in the open market and will ultimately lead to ________ in aggregate demand
A) selling; an increase B) selling; no change C) buying; no change D) buying; an increase E) selling; a decrease
The fact that individuals substitute away from a taxed activity creates _____
a. the excess burden of taxation b. the welfare cost of taxation c. deadweight loss of taxation d. all of the above e. a and b
When will speculators' actions raise social welfare?
a. Always. b. When they drive down market prices. c. When their expectations prove to be correct. d. When they are not risk averse.
Complete the following sentence. Because money functions as a ________ it eliminates the need for bartering.
A. medium of exchange B. double coincidence of wants C. store of value