Suppose that a person in the United States earns $5,000 and faces an income tax rate of 25 percent. If that person saves $2,000 and invests it at 12 percent then he or she will pay
A) less in taxes because of the saving. B) tax only on the income spent.
C) more in taxes than if there had been no saving. D) tax only on the amount saved.
C
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Identify some problems or issues that are both economic and political.
What will be an ideal response?
The utility of a good is:
a. different for different consumers. b. the same for all consumers. c. constant no matter how much is consumed. d. related to the cost of producing it. e. easily measured.
Economic analysis suggests that countercyclical macro-policy will
a. be difficult to time properly because of uncertainty about the future direction of the economy. b. be difficult to implement because we do not know whether monetary policy is transmitted through the interest rate, or whether it affects aggregate demand directly. c. reduce the natural rate of unemployment when macro-policy is persistently expansionary. d. help reduce economic instability if, and only if, we are willing to tolerate double-digit inflation.
Suppose the official unemployment rate is 10 percent. We can conclude without question that:
a. one of every 10 people in the civilian labor force is currently unemployed. b. the same 10 percent of the people in the economy were out of work for the entire year. c. every person in the civilian labor force was out of work for 10 percent of the year. d. the same 10 percent of the people in the civilian labor force were out of work for the entire year.