Under most circumstances, the application of taxes on goods will only affect who gets the goods
Indicate whether the statement is true or false
False. Taxes will affect which goods are produced, how goods are produced, and who gets the goods.
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An upper limit to the quantity of a good that may be produced in a specific period is called
A) production quota B) import quota C) price ceiling D) price floor
Which of the following is a positive statement?
a. I think we should pass a constitutional amendment to reduce the deficit. b. President Clinton's way of dealing with the economy is better than President Bush's. c. I hope interest rates come down soon. d. If taxes are raised, unemployment will drop.
Which of the following is a practical question to implementing Keynesian economic policies to stimulate the economy?
a. Does the government know whether it is better to increase spending or increase taxes? b. Does the government know whether it is better to cut spending or cut taxes? c. Does the government know when there is cyclical unemployment? d. Does the government accurately know what the country’s potential GDP is?
When an economy is operating below its potential capacity, Keynesian economists argue that
a. taxes should be raised if the government is currently running a budget deficit. b. taxes should be lowered but only if the government is running a budget surplus. c. the government should cut taxes and/or increase expenditures in order to stimulate aggregate demand. d. both a and b are correct. e. all of the above are correct.