Which of the following are counterarguments to the viewpoint that taxes are social tools by which we can achieve a more equal society?
a. Redistribution of income through government is unfair coercion of those with higher incomes.
b. Inequality is frequently the result of higher productivity and thus is just.
c. Equality of income occurs naturally over the life cycle so redistribution at one point in time disrupts this natural process.
d. a and b
e. a and c
d
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Suppose two firms produce close substitutes such that reducing the price of one product reduces the quantity demanded of the other. If those two firms merge:
A. they can earn higher profits by continuing to sell both products if the profit gained from increased sales of one product are greater than the lost profits from reduced sales of the other product. B. they will eliminate the less profitable product and sell only one. C. they will raise prices on both products. D. they will be unable to earn higher profits because the two products will compete against each other.
If policymakers attempt to offset a favorable inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a lower B. easing; a higher C. tightening; a higher D. tightening; a lower
Which of the following do not suffer the costs of inflation?
A) firms that have to devote more time and labor to raising prices B) persons on fixed incomes C) persons whose incomes rise more rapidly than inflation D) an investor that has to pay higher taxes because of the inflation
The cross-price elasticity of demand between pancakes and waffles is positive. This indicates all of the following except one. Which is the exception?
a. Pancakes and waffles are substitutes. b. An increase in the price of pancakes will shift the demand curve for waffles to the right. c. An increase in the price of waffles will shift the demand curve for pancakes to the right. d. A decrease in the supply of waffles will shift the demand curve for pancakes to the right. e. Pancake demand and waffle demand are price elastic.