Under a progressive income tax system, the marginal income tax rate paid by taxpayers
A) declines as their incomes increase.
B) rises as their incomes increase.
C) is unchanged as their incomes increase.
D) is unrelated to their incomes.
Answer: B
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Suppose there are only two goods: guns and roses. If the relative price of guns falls, then the relative price of roses
a. must also fall. b. must rise. c. is unaffected. d. could rise, fall, or remain unchanged.
Because of the existence of the aggregate demand multiplier, a $10 billion change in expenditure
A) shifts the aggregate demand curve by more than $10 billion. B) shifts the aggregate demand curve by $10 billion. C) shifts the aggregate demand curve by less than $10 billion. D) changes the slope of the aggregate demand curve so it is less stee
One of the factors important to game theory is that firms act ______.
a. in a way to minimize damage from their competitors b. in a way to maximize the bandwagon effect c. together to achieve the same outcome as a monopolist d. together to control important inputs to their industries
When managers of firms are given fixed salaries, which are not tied to the firm's profits, they generally put forth less effort than they otherwise would. This is an example of:
A. risk aversion. B. adverse selection. C. moral hazard. D. None of the answers are correct.