If Linda’ annual income is $160,000 and she pays $35,000 in taxes, and Paul’s annual income is $100,000 and he pays $25,000 in taxes, the tax system is
A. regressive.
B. progressive.
C. proportional.
D. degressive.
Answer: A
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Which of the following is true of individual income taxes?
A) Individual income taxes are only collected by the federal government. B) Individual income taxes are only collected by the state governments. C) All states in the U.S. collect individual income taxes. D) The rate of income tax imposed by states in the U.S. varies.
Suppose we are considering the relationship between two variables y and x. y is measured on the y-axis and x is measured on the x-axis, and the relationship between then is a straight line. Suppose that the slope of the line is equal to 1
This slope means that A) a change in x is associated with a bigger change in y. B) a change in x is associated with a smaller change in y. C) a change in x is associated with no change in y. D) a change in x is associated with an equal change in y.
Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets
A) adverse selection; moral hazard B) adverse selection; risk sharing C) moral hazard; transactions costs D) adverse selection; economies of scale
The current international financial system is a managed float exchange rate system because
A) exchange rates fluctuate in response to, but are not determined solely by, market forces. B) some countries keep their currencies pegged to the dollar, which is not allowed to fluctuate. C) all countries allow their exchange rates to fluctuate in response to market forces. D) all countries peg their currencies to the dollar which is allowed to fluctuate in response to market forces.