A tax code is described as being "neutral" if it
A. does not favor particular forms of income or expenditures.
B. favors socially good consumption over destructive consumption.
C. encourages work and savings rather than consumption.
D. achieves both vertical equity and horizontal equity.
Answer: A
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All of the following are assumed to be constant when the supply curve for a product is drawn, except the:
A. Price of the product B. State of technology C. Number of producers D. Price of inputs used to make the product
In William Safire’s 1983 essay, “Smoot-Hawley Lives,” he argues that the United States should
A. threaten retaliation if trading partners practice protectionism. B. pursue a unilateral free trade policy regardless of what others do. C. limit government’s role in the economy.
The potential for a financial breakdown at one financial institution to spread throughout the financial system is known as a
A. moral hazard. B. liquidity risk. C. lending risk. D. systemic risk.
With respect to production, the short run is best defined as a time period
A) lasting about six months. B) lasting about two years. C) in which all inputs are fixed. D) in which at least one input is fixed.