It has been recommended in Congress, on occasion, that the progressive income tax be converted into a proportional tax, with everyone paying the same tax rate. Is this a good proposal?
What will be an ideal response?
This would be a good proposal if a tax rate could be found that would bring in the same amount of revenue. To accomplish this, a large number of tax exemptions would probably have to be eliminated. A proportional tax would make the income tax law and structure easier to understand and administer. On the other hand, it would represent a repudiation of the ability-to-pay and equality-of-sacrifice principles on which the current income tax is based.
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The total government expenditure multiplier is less than one because
A) government expenses affect labor demand. B) labor supply reacts to interest rate changes and consumption demand is affected by taxes. C) investment demand falls dramatically when the government goes into debt. D) the marginal propensity to consume is less than one.
First-mover advantage is:
A. most advantageous in a prisoner's dilemma-type game. B. very important in one-round sequential games. C. likely to lead to a positive-positive outcome. D. None of these statements is true.
For every firm that faces a downward-sloping demand curve for its output,
a. marginal cost exceeds marginal revenue at all output levels b. marginal revenue equals the price of the last unit sold c. marginal revenue is less than the price of the last unit sold d. marginal revenue exceeds the price of the last unit sold e. marginal cost exceeds the price of the last unit sold
Refer to Exhibit 2-1. The opportunity cost of moving from point A to B is
 ANSWER 6.png)