If a tax rate falls as a person's income rises, the tax is a:
A. proportional tax.
B. progressive tax.
C. regressive tax.
D. poll tax.
Answer: C
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In the event of a detrimental externality that affects the public interest, government action is the only solution.
Answer the following statement true (T) or false (F)
An economy that experiences decreasing real GDP and increasing prices is said to suffer from _____.
(A) Stagflation (B) A depression (C) A recession (D) A business cycle
A downward shift in the Fed's reaction function is equivalent to:
A. a decline in the Fed's long-term target for inflation. B. a downward shift of short-run aggregate supply. C. an upward shift of short-run aggregate supply. D. an increase in the Fed's long-term target for inflation.
What is the largest component of the federal budget?
A) discretionary spending B) entitlements and mandatory spending C) defense spending D) net interest