As the economy expands, the collection of personal income tax revenues automatically rises. This relationship best describes how the progressive income tax system:
A. increases crowding out in the economy.
B. offsets the timing problem for fiscal policy.
C. decreases real interest rates in the economy.
D. provides built-in stability for the economy.
Answer: D
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An increase in the demand for peanut butter, a normal good, can be caused by a(n):
a. decrease in consumer income. b. increase in the price of jams, jellies, and preserves. c. decrease in the price of bread. d. drought in Georgia that destroyed 30 percent of the peanut crop. e. decrease in the price of bologna.
The total value added in the production of a final good
a. exceeds the price of the final good. b. equals the price of the final good. c. exceeds the total payments made to owners of productive resources used in the production. d. both equals the price of the final good and exceeds the total payments made to owners of productive resources used in the production.
Demand is elastic along the upper half of a linear demand curve, which means that a decrease in price will increase the quantity sold by a larger percentage amount.
Answer the following statement true (T) or false (F)
One claim that trade barrier proponents use to enforce environmental standards is that
A) environmental standards do not reduce industrial competitiveness and do not induce race-to-the-bottom, where countries are forced to rescind their standards in order to maintain employment. B) high standards in industrialized nations motivates some firms to "export pollution" to developing countries by relocating their dirty industries. C) enforcing environmental standards is essential, as there are no differences between labor standards and environmental standards. D) all environmental impacts are non-transboundary.