During a contraction,
A) higher income tax revenues tend to automatically increase a budget deficit or reduce a budget surplus.
B) higher income tax revenues tend to automatically increase a budget surplus or reduce a budget deficit.
C) lower income tax revenues tend to automatically increase a budget deficit or reduce a budget surplus.
D) lower income tax revenues tend to automatically increase a budget surplus or reduce a budget deficit.
Ans: C) lower income tax revenues tend to automatically increase a budget deficit or reduce a budget surplus.
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You and your roommate go to a Sunday brunch at the local restaurant. All you can eat for $4.95. You enjoyed your meal. Your roommate didn't care for it at all. Each of you paid your bill in full. Who incurred a sunk cost?
A) Both you and your roommate B) Only you C) Only your roommate D) Neither of you
Which of the following statements concerning the prisoner's dilemma is TRUE?
A) The player who moves last will always win. B) Confessing is the dominant strategy for both players. C) Neither player will pick the dominant strategy. D) The player who moves first will always win.
Steel producers in the United States observe that foreign sales of U.S. steel has drastically declined due to stringent trade policies adopted by the foreign governments and unfair treatment of U.S. steel exports in foreign countries. The lobbying efforts of such loss making U.S. steel manufacturers induces the domestic government to restrict the entry of imported steel and help stimulate the
sales of domestically produced steel. Which of the following is most similar to the example mentioned above? a. A tariff imposed by the government to stimulate domestic production of a high-technology good with positive spillover effects b. A tariff imposed by the government on the import of cotton textiles because it is an infant industry in the domestic country c. An import tariff applied against a foreign monopoly supplying the domestic market d. Taxes imposed by the government on an import competing industry that generates a negative production externality e. Reciprocal tariffs introduced by the government of Mexico on tobacco imports from Brazil in retaliation to unfair treatment of Mexican tobacco exports to the latter
Fixing the insolvency problem caused by the Great Recession, the government was reluctant to infuse equity into financial institutions because:
a. It would transfer the problem to the government but may not solve the underlying causes. b. Equity infusions had to be funded, and the government already had a major debt problem. c.The government could be accused of nationalizing the U.S. financial system. d. All of the above.