When government policies change it can:
a. alter incentives
b. alter trade-offs
c. change opportunity costs
d. do all of the above.
d
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Answer the next question on the basis of the following four tax schedules for the given base of taxable income.IncomeTax ATax BTax CTax D$10,000$650$1,000$500$1,00020,0008502,0001,0003,00030,0009504,0001,5006,00040,0001,0506,0002,0009,500Which of the above tax schedules is a regressive tax schedule throughout?
A. Tax A B. Tax B C. Tax C D. None of these schedules are correct.
Which of the following is not a characteristic of a market with a price floor?
A. Quantity demanded exceeds quantity supplied B. Sellers offering discounts in disguised forms C. Problem of disposal created by excess supply D. Survival of less efficient businesses
If the consumption function is given by C = 100 + 0.75(Y-T), then an increase of 10 units in taxes will cause the IS schedule to shift to the right by
a. -30 units. b. -10 units. c. 30 units. d. 40 units.
Which of the following statements best illustrates the concept of derived demand?
A. As income goes up, the demand for farm products will increase by a smaller relative amount. B. A decline in the price of margarine will reduce the demand for butter. C. A decline in the demand for shoes will cause the demand for leather to decline. D. When the price of gasoline goes up, the demand for motor oil will decline.