The incentive to work is an ingredient of the negative income tax because:
a. if families do work, they will be eliminated from the program.
b. if families don't work, they will be eliminated from the program.
c. the more income earned in the workplace, the higher the family's after-tax income.
d. the more income earned in the workplace, the higher the payment from the government.
e. the amount earned in the workplace is not subject to income taxes.
c
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Without a central bank, such as the Federal Reserve System, banks, if left to themselves, are likely to
a. create insufficient money when the economy is at full employment b. create too much money when the economy is in a recession c. forego money creation opportunities when the economy is at full employment d. hold less deposits than socially desirable when the economy is at full employment e. hold more excess reserves than socially desirable when the economy is in a recession
Proponents of rational expectations argue that failing to account for peoples' revised inflation expectations led to estimates of the sacrifice ratio that were too high
a. True b. False Indicate whether the statement is true or false
The gross domestic product provides an estimate of society's evaluation of the relative worth of goods and services because it:
A. includes all income created by a nation's citizens, home or abroad. B. is a monetary measure. C. takes into account the value of security transactions. D. excludes public and private transfer payments.
Suppose the annual inflation rate is 10%, and an asset bought at the beginning of the year for $100,000 is sold for $115,000. If the capital-gains tax rate is 30%, what is the (approximate) effective tax rate on the sale of this asset?
A) 10% B) 20% C) 25% D) 30% E) 4%