Excess burden is caused by the fact that taxes
A. are spent in ways that taxpayers do not support.
B. distort economic decisions.
C. are regressive instead of progressive.
D. generate less revenue than the government spends.
Answer: B
You might also like to view...
Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. Before the oil embargo, the price
ceiling on gasoline had no noticeable effect on the market. What is the most likely explanation for this? A) The equilibrium price of gasoline was probably below the price ceiling. B) The demand curve for gasoline in the 1970s was vertical. C) The supply curve for gasoline in the 1970s was vertical. D) The equilibrium price of gasoline was probably above the price ceiling.
The sum of all past federal deficits minus any surpluses is called the
A) transfer balance. B) national deficit. C) national debt. D) national budget.
The reserve requirement is:
A. a loose guideline for how much banks must hold in reserves. B. the regulation that sets the minimum fraction of deposits banks must hold in reserve. C. currently set at $2 million for most banks. D. the dollar amount of cash banks must keep on hand and not loan out.
What is the equivalent tax-exempt bond yield for a taxable bond with an 8% yield and a bondholder in a 35% marginal tax rate? Explain.
What will be an ideal response?