If two families are identical with respect to size, income, general expenses, etc., and are taxed equally, we say that there is
A. horizontal equity.
B. vertical equity.
C. observance of the ability-to-pay principle.
D. intergenerational equity.
Answer: A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If the deficit is increasing because of the effects of automatic stabilizers, _____
a. the budget is annual balanced b. the economy is contracting c. the annual deficit will approach zero d. the budget is cyclically balanced e. the economy is growing
A firm that sells its output and hires its labor in perfectly competitive markets
a. controls the price of its output, but accepts the wage rate it pays as given b. controls both the price of its output and the wage rate it pays c. controls the rate it pays, but accepts the price of its output as given d. accepts both the price of its output and the wage rate it pays as given e. controls the price of its output, the wage rate it pays, and its own output level
Most economists _________ tariffs and _________ quotas.
A. favor; favor B. oppose; oppose C. favor; oppose D. oppose; favor