Why are consumption taxes relevant for measuring the tax wedge?
What will be an ideal response?
A tax on consumption raises the price paid for consumption goods and services and so is equivalent to a cut in the real wage rate from the perspective of workers.
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The argument advanced by Milton Friedman for adopting a monetary growth rule is that
A) active monetary policy potentially destabilizes the economy. B) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. C) the growth rate of M1 has been unstable. D) the Fed can control the money supply, but not the level of interest rates.
The current international financial system is a managed float system
a. True b. False
(Consider This) The supply of higher education in the United States is:
A. highly price elastic. B. highly price inelastic. C. unitary elastic with respect to price. D. perfectly price elastic.
Which of the following is the most liquid asset?
A) a Renoir painting B) bonds C) a car D) money