Dynamic tax analysis assumes that
A) an increase in a tax rate may lead to a decrease in the tax base.
B) an increase in a tax rate will lead to an increase in the tax base.
C) an increase in a tax rate will leave the tax base unchanged.
D) the tax base will always remain unchanged.
Answer: A
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If products C and D are close substitutes, an increase in the price of C will
A. tend to cause the price of D to decrease. B. shift the demand curve for D to the right. C. shift the demand curves for both products to the right. D. shift the demand curve for C to the left and the demand curve for D to the right.
When a perfectly competitive, well-functioning market is in equilibrium:
A. consumer surplus is minimized. B. producer surplus is minimized. C. total surplus is maximized. D. total surplus is zero.
Increased investment in infrastructure will shift
A. Both aggregate supply and aggregate demand to the right. B. The Phillips curve to the right. C. Both the Phillips curve and aggregate demand to the left. D. Aggregate supply to the right and aggregate demand to the left.
Gordon is a person who sells narcotics "on the street." This type of illegal activity:
A. Would be considered double counting in calculating GDP B. Is estimated and included in GDP figures C. Is excluded from GDP figures D. Causes GDP to be overstated