When income is $15,000, the amount of income income taxes owed is $2,000; when income increases to $20,000, the amount owed increases to $3,000. The marginal tax rate in this case is
A. 20 percent.
B. 15 percent.
C. 13.3 percent.
D. 25 percent.
Answer: A
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To correct a nominal quantity for changes in the price level, one should:
A. multiply it by a price index. B. divide it by a price index. C. add a price index to it. D. subtract a price index from it.
Which of the following statements refers to rent seeking?
A) "The role of the federal government in the U.S. economy grew significantly after the Great Depression. Government spending and taxes are a much greater proportion of total income today than they were in 1929." B) "Laws passed by the federal government often provide benefits for a small number of individuals. These individuals, in turn, have an incentive to contribute to the campaigns of politicians who pass these laws." C) "The federal government should spend more money on programs that help low income citizens and less money on national defense." D) "There is an opportunity cost whenever the federal government spends tax revenue. For example, an additional $1 billion spent on national defense means there will be less revenue for highway construction and maintenance or some other program."
If purchasing-power parity holds, then the value of the
a. real exchange rate is equal to one.
b. nominal exchange rate is equal to one.
c. real exchange rate is equal to the nominal exchange rate.
d. real exchange rate is equal to the difference in inflation rates between the two countries.
If a perfectly competitive firm is a price taker, then which of the following is true?
a. Pressure from competing firms will force acceptance of the prevailing market price. b. The firm must be a relatively small player compared to its competitors in the overall market. c. The firm can increase or decrease its output without affecting the overall quantity supplied in the market. d. Quality differences will be very perceptible and will play a major role in purchasers' decisions.