According to this Application, some conservatives worry that a value-added tax ________ and some liberals worry that a value-added tax ________
A) will penalize high-income individuals; will decrease per-capita GDP
B) will discourage consumers from saving; will decrease federal tax revenue
C) will result in consumers not realizing all the taxes they pay; is regressive
D) is progressive; will reduce investment.
C
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Keynes' theory of consumption predicts that the aggregate saving rate
A) increases as society becomes richer. B) falls as society becomes richer. C) is constant in the long-run. D) falls with higher incomes in a cross-section of income.
Collusive action among producers creates higher prices for consumers because it:
A. causes overproduction and inefficiency. B. creates negative externalities. C. forces producers to be more competitive. D. allows producers to artificially restrict their supply.
In a market where businesses are earning high profits, new entrants will cause the supply curve to shift to the _________ and thus cause the market price to _________.
A. right; rise B. left; rise C. left; fall D. right; fall
An agreement among firms to charge the same price or otherwise not to compete is called
A) a payoff matrix. B) a subgame-perfect equilibrium. C) a Nash equilibrium. D) collusion.