What happens to the market price that buyers face as a result of taxation?
A. Taxation has no effect on price, only output.
B. It is greater than before the tax was imposed.
C. Taxation affects average cost only.
D. It is less than before the tax was imposed.
Answer: B
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The average tax rate is calculated as
A) total income divided by the total tax paid. B) the change in income divided by the change in total tax paid. C) total tax paid divided by total income. D) the change in total tax paid divided by the change in income.
How do changes in income tax policies affect aggregate demand?
A) Higher taxes increase corporate investment and aggregate demand. B) Higher taxes reduce disposable income, consumption, and aggregate demand. C) Higher taxes increase aggregate supply and thus increase aggregate demand as well. D) Higher taxes increase disposable income, consumption, and aggregate demand.
Suppose the Bureau of Labor Statistics interviews 194,000 people in its monthly survey: 91,300 are not in the labor force, 94,000 are employed, 6650 are unemployed, and 1,150 are in the armed forces. What is the unemployment rate the BLS announces?
A) 4.95 percent B) 3.94 percent C) 7.0 percent D) 6.55 percent E) 6.48 percent
The removal of a price ceiling in a market results in:
a. an increase in the market price. b. a shortage in the market. c. over-production of the commodity and a surplus. d. a fall in the market price. e. abnormal profits for producers.