Suppose an income tax is imposed that takes $2,000 from someone with an income of $20,000, $2,500 from someone with an income of $30,000, and $4,000 from someone with an income of $80,000. This tax would be classified as
A. proportional.
B. a flat tax.
C. regressive.
D. progressive.
Answer: C
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In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and
the IS curve to shift to the ________, everything else held constant. A) rise; left B) rise; right C) fall; left D) fall; right
Because of transactions which take place in the underground economy, the
a. GDP calculation tends to overstate the actual value of goods sold in the economy. b. GDP calculation tends to accurately portray the value of goods sold in the economy. c. GDP calculation tends to understate the actual value of goods sold in the economy. d. value of the GDP calculation will be equal to the value of the national income calculation. e. value of the GDP calculation through the expenditure approach will be greater then the value calculated through the income approach.
China's capital market is:
a. efficient because it lends to large companies b. is comprised of private lenders who are willing to led for long maturities c. noted for lending based on political considerations d. does not discriminate between public and private borrowers e. none of the above
The income level below which families are said to be poor is known as the
a. income maintenance threshold. b. poverty line. c. bottom quintile of the income distribution. d. minimum wage.