As real incomes grow, what happens to federal tax revenues as a share of the economy?
The tax system of the United States is progressive: taxes take a larger share of the income of those with higher earnings. Because of this progressivity, as incomes grow, more of it will be taxed at higher rates. Thus, the share of income taxed away from citizens will expand as the real incomes of individuals increase. As a result, if there are no changes in tax legislation, taxes will increase as a share of the economy as real incomes grow.
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Which of the following would most likely cause a country's production possibilities set to shift outward at every point along the frontier?
A) a decrease in idle capital B) a decrease in unemployment C) a general technological advance that affects all sectors of the economy D) a technological advance in only one sector of the economy E) none of the above
As the economy turns the corner into a recession, the level of unplanned inventories ________ and firms ________ production
A) increases; do not change B) decreases; begin to decrease C) increases; begin to decrease D) decreases; begin to increase E) increases; begin to increase
The figure above portrays a total revenue curve for a perfectly competitive firm. The firm's marginal revenue from selling a unit of output
A) equals $0.50. B) equals $1.00. C) equals $2.00. D) cannot be determined.
In the short run, marginal cost is increasing when
A) MPL is decreasing. B) MPL is increasing. C) APL is increasing. D) APL is decreasing.