Federal tax policy:
A. treats employer health insurance premiums as taxable income.
B. subsidizes health insurance and thereby increases the demand for health care.
C. subsidizes health insurance and thereby decreases the demand for health care.
D. corrects the overallocation of resources to the health care industry that would otherwise
exist.
Answer: B
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Water is cheap and diamonds are expensive because water has a ________, and diamonds have a ________
A) low total utility; high total utility B) low marginal utility; high marginal utility C) high marginal utility; low marginal utility D) low marginal utility and a low total utility; high marginal utility and a high total utility
There are two types of open market operations: ________ open market operations are intended to change the level of reserves and the monetary base, and ________ open market operations are intended to offset movements in other factors that affect the
monetary base. A) defensive; dynamic B) defensive; static C) dynamic; defensive D) dynamic; static
Ricardian equivalence implies
A) that when the government borrows more, the market real interest rate goes up. B) that if the government saves less, then the nation saves less. C) that when taxes are cut people consume more. D) that consumers will save their tax cuts to pay their future taxes.
The balance of payments is:
A. the accounting of trade in financial assets. B. the accounting of trade in goods and capital. C. positive when a country has a trade deficit. D. negative when a country has a trade surplus.