Which of the following statements is false?
A. An income tax taxes savings twice only if consumption is the measure used to gauge a person's ability to pay.
B. Proponents of income as a tax base argue that you should not be taxed on what you draw out of the common pot, but rather on the basis of your ability to draw from the pot.
C. At this time, there is not clear consensus on what the best tax base is.
D. The double taxation of saving tends to increase the saving rate because people have to save more to keep the after-tax yield constant.
Answer: D
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Refer to Figure 2-11. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?
A) They have the same advantage. B) Pakistan C) Indonesia D) cannot be determined
Other things equal, the supply of labor will be greater to a job that
a. requires advanced education and training b. requires most working hours be on weekends c. requires hard physical labor d. allows the employee greater discretion in the use of time e. has a higher probability of injury or death
If the reserve requirement ratio at Forest Hills Bank is 16 percent, what is its money multiplier?
a. 0.84 b. 4 c. 16 d. 6.25
One In the News article titled "Perceptions of Government Failure" indicates that people think that the government is not very trustworthy when it comes to solving domestic issues. If this is true, this is an example of
A. Government failure. B. The free-rider dilemma. C. Market failure. D. The problem of externalities.