An increase in deductions, exemptions, and credits in the tax code will
A. Induce economic activity to go underground.
B. Reduce the tax base.
C. Allow lower rates to raise the same tax revenues.
D. Increase the marginal tax rate.
Answer: B
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Certain countries remain backward because they nurture superstition and are suspicious of new technology. This argument is based on the:
A) geography hypothesis. B) location hypothesis. C) culture hypothesis. D) capital hypothesis.
A company will shut down in the short run if it cannot cover its __________ and will exit the industry in the long run if it cannot cover its __________
Fill in the blank(s) with correct word
An equal decrease in all bond interest rates
A) increases the price of a five-year bond more than the price of a ten-year bond. B) increases the price of a ten-year bond more than the price of a five-year bond. C) decreases the price of a five-year bond more than the price of a ten-year bond. D) decreases the price of a ten-year bond more than the price of a five-year bond.
According to classical macroeconomists, prices adjust ________ to shocks, so the government should ________.
A. rapidly; fight recessions B. rapidly; do little C. slowly; fight recessions D. slowly; do little