The actual burden of a tax is determined primarily by
a. the elasticities of demand and supply.
b. the legal (or statutory) assignment of the tax.
c. the number of exchanges that are eliminated from the market as a result of the tax.
d. none of the above.
A
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The expenditure multiplier equals 5 and there is a $3 million increase in investment. Equilibrium expenditure
A) increases by $5 million. B) increases by $0.60 million. C) increases by $15 million. D) decreases by $15 million. E) increases by $3 million.
When a large number of people in society save more and it results in a decline in national income and an increase in unemployment this is known as
a. the fallacy of composition. b. moral hazard. c. the paradox of thrift. d. marginal analysis.
During times of inflation conservative economists would be most in favor of
A. spending cuts. B. spending increases. C. tax cuts. D. tax increases.
When national income in other nations decreases, aggregate demand in our economy ________.
A. decreases because our imports will increase B. decreases because our exports will decrease C. increases because our imports will decrease D. increases because our exports will increase