Joe earns $100,000 per year. He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000. This tax system is an example of a
A) regressive income tax.
B) negative income tax.
C) progressive income tax.
D) proportional income tax.
A
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Microsoft raises the price of its Office software by 10 percent. As a result, the quantity of personal computers demanded at the current price decreases by 5 percent
What is the cross elasticity of demand for personal computers with respect to the price of Microsoft Office software? A) -2.0 B) -0.5 C) 0.5 D) 2.0
A microeconomist might study which of the following?
a. the collapse of US financial markets in 2007-2009 b. the causes of the Great Depression c. the movements of prices for unleaded gasoline d. the role of expectations in the determination of the level of real GDP e. the trade-off between inflation and unemployment
The discount rate is the interest
A. rate at which the central banks lend to the United States Treasury. B. rate at which the Federal Reserve Banks lend to commercial banks and thrift institutions. C. yield on long-term government bonds. D. rate at which commercial banks and thrifts lend to the public.
When countries have severe balance of payments difficulties caused by unsustainable current account deficits, they can approach the International Monetary Fund (IMF) for assistance. In providing financial assistance, the IMF generally insists that the country implement a series of policy changes designed to reduce the deficit. These programs are controversial as they tend to focus on demand reduction. Explain why demand reduction would solve a current account deficit problem. Would a program designed to increase the nation's gross domestic product (GDP) growth rate be a method of reducing a current account deficit? Why or why not?
What will be an ideal response?