Senator Smith proposes that the income tax structure be revised to have two tax rates. The first, 16 percent, applies to persons whose income is between $0 and $40,000 a year. The second, 23 percent, applies to persons whose income is more than $40,000 a year. This is a
A) regressive income tax structure.
B) proportional income tax structure.
C) progressive income tax structure.
D) cyclical income tax structure.
C
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You have a $500 saving bond. If the nominal interest rate is 10 percent, then the inflation rate must be
A) 10 percent if in real terms you earned $200. B) 10 percent if in real terms you earned $100. C) zero, otherwise you would sell the bond. D) 4 percent if in real terms you earned $30. E) 4 percent if in real terms you earned $70.
If the actual rate of unemployment equals the natural rate of unemployment, then:
A. potential output equals real GDP. B. potential output is greater than real GDP. C. potential output is less than real GDP. D. there is a recessionary gap.
The production possibilities curve bows outward from the origin because:
A. resources are not of uniform quality. B. more production of one good results in more production of the other good. C. opportunity costs increase as the production of a good increases. D. opportunity costs decrease as the production of a good increases.
If the world price for a good is above a nation's pre-trade equilibrium price, then the nation
A) will export the good. B) will import the good. C) will neither export nor import the good. D) cannot gain from trade. E) Both C and D.