Vertical equity means that
A. people pay a flat rate.
B. equal people are treated unequally.
C. people across the income scale are treated fairly with regard to ability to pay.
D. equal people are treated equally.
Answer: C
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Which of the following statements is true?
A) If households expect higher taxes in the future, they will decrease their current savings rate. B) The savings rate of households is dependent only on current consumption expenditure. C) The savings rate of households is dependent only on consumption expenditure planned for the future. D) If households expect higher taxes in the future, they will increase their current savings rate.
In a Keynesian model, a temporary increase in government purchases would cause output to ________ and the domestic real interest rate to ________, in the short run
A) remain unchanged; increase B) remain unchanged; decrease C) increase; increase D) increase; decrease
If the nominal money supply rises by 6 percent, the price level rises by 4 percent, and output rises by 3 percent, then according to the quantity theory equation, income velocity must rise by:
a. 7 percent b. 13 percent c. 1 percent. d. 3 percent.
Taxes on emissions have
A. led to firms discovering costless methods of extraction of pollutants from liquid discharges. B. led to increased waste disposal of pollutants. C. led to voluntary reduction in emissions to avoid the taxes. D. not been an efficient penalty. Firms continue to pollute.