Tax loopholes serve to
a. improve the incomes of the poor.
b. erode the progressivity of the income tax.
c. increase the progressivity of the income tax.
d. decrease work incentives for the poor.
b
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One role of the interest rate is to
A) allocate capital to its most efficient uses. B) redistribute income from the wealthy to the poor. C) reduce the rate of inflation by encouraging government borrowing. D) discourage saving and encourage current consumption.
Which of the following is not one of the four principles of individual decision making?
a. People face trade-offs. b. Trade can make everyone better off. c. People respond to incentives. d. Rational people think at the margin.
Consider the following payoff matrix facing Harry and Sally when each chooses to go to the coffee shop listed. Both Harry and Sally would like to meet each other but are shy about asking the other out on a date. Harry StarbucksDunkin DonutsSally StarbucksH: 1, S: 1H: 0, S: 0 Dunkin DonutsH: 0, S: 0H: 1, S: 1What is Harry's best strategy?
A. Harry has no best strategy. B. Stay at home. C. Go to Starbucks. D. Go to Dunkin' Donuts.
Federal government purchases as a percentage of GDP
A) have risen since the early 1950s. B) have fallen since the early 1950s. C) have remained roughly the same since the early 1950s. D) rose from the early 1950s until the mid 1980s, and then fell.