A family that earns $20,000 a year pays $400 a year in city wage taxes. A family that earns $40,000 a year pays $1,400 a year in city wage taxes. The city wage tax is a ________ tax.
A. progressive
B. regressive
C. proportional
D. benefits-received
Answer: A
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Suppose the government increases government spending and increases taxes by the same amount to pay for it. We would predict ________.
A. real GDP will increase B. the effect on real GDP depends on the size of the MPC C. real GDP will fall D. real GDP will not change
Unanticipated inflation is associated with cost increases which are not expected
Indicate whether the statement is true or false
Refer to the given table. Suppose the columns in this table reflect demand and supply. At a price of $50:Price Per UnitColumn A Units Per YearColumn B Units Per Year$2010040$309550$408060$506570$605080
A. there will be an excess supply of 70 units. B. there will be an excess supply of 5 units. C. there will be an excess demand of 5 units. D. the market will be in equilibrium.
Why is the prisoner's dilemma game useful in studying oligopoly behavior?
A) Because oligopolies make out like bandits.
B) To illustrate the problems encountered when making decisions under uncertainty.
C) To show that oligopolies behave as monopolists in the long run and earn positive economic profits.
D) To illustrate how barriers to entry lead to economic profits.