Social Security taxes are
A. progressive because all workers pay the tax.
B. regressive because higher income workers don't pay the tax.
C. proportional because everyone is charged the same percentage tax rate.
D. regressive because higher income workers pay taxes on a smaller percentage of their income.
Answer: D
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Investment is defined as
A) the purchase of a stock or bond. B) the purchase of new capital goods by firms. C) spending on capital goods by governments. D) what consumers do with their savings. E) financial capital.
The problem of "asymmetric information" is that the
A) lender knows more than the borrower. B) borrower knows more than the lender. C) borrower and lender have different goals. D) borrower and lender know the future much less than they do the present.
Special interests have an incentive to become informed about a policy from which they could receive concentrated benefits
Since other voters remain rationally ignorant of the policy, the special interests will have considerable influence in the legislature. Will special interests receive everything they want from the legislature? Why or why not? How will the legislature determine what the special interests will receive?
During an inflationary period, the Federal Reserve is most likely to
a. lower the discount rate. b. buy government securities. c. lower reserve requirements. d. raise the discount rate.