Which of the following is true of indirect business taxes?
a. They are included in corporate profits.
b. They are not included in the GDP.
c. They reduce the value of total economic output thereby reducing the value of the GDP.
d. They are collected by business firms that act as agents for the government.
e. They are the same as personal income taxes.
d
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Suppose the current level of output is 5000. If the elasticities of output with respect to capital and labor are 0.3 and 0.7,
respectively, a 10% increase in capital combined with a 5% increase in labor and a 5% increase in productivity would increase the current level of output to A) 5015. B) 5325. C) 5575. D) 6000.
What factors increase potential GDP? Include a definition of potential GDP in your answer
What will be an ideal response?
The U-shaped yield curve in the figure above indicates that the inflation rate is expected to
A) remain constant in the near-term and fall later on. B) fall sharply in the near-term and rise later on. C) rise moderately in the near-term and fall later on. D) remain constant in the near-term and rise later on.
Improvements in labor productivity
A) affect the level of wages, but do not affect the rate of economic growth. B) affect the level of profit, but do not affect the rate of economic growth. C) hinder economic growth, because they cause unemployment. D) contribute to economic growth.