Which of the following is an example of a leakage into the circular flow of income and expenditure?
a. Saving
b. Exports
c. Government expenditure on goods
d. Transfer payments
e. Investment by firms
b
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Every country in the world has an independent central bank
Indicate whether the statement is true or false
Suppose fairness is defined as those with the highest incomes can afford to pay a greater proportion of their income in taxes. Then which of the following taxation systems would be consistent with this notion of fairness?
a. A true flax tax. b. A flat sales tax on consumption purchases. c. A progressive tax on income. d. A fixed federal tax of $5,000 that everyone pays regardless of income status.
Government action will often result in the counterproductive use of resources because
a. there is often a conflict between winning political elections and adoption of only productive programs. b. many politicians are not interested in how their legislative votes will influence their chances of winning future elections. c. politicians are often unwilling to listen to interest groups that have specialized knowledge. d. voter participation is low; if more people voted, the political process would be more efficient.
Shortly after the 2012 election, the AMT was reformed to
A. reduce the tax liabilities of the taxpayers with the lowest taxable incomes. B. index its thresholds for inflation. C. reduce the tax liabilities of the taxpayers with the highest taxable incomes. D. remove inflation.