Taxes in the United States are automatic stabilizers in that
A. tax revenues increase when income increases, thus offsetting some of the increase in aggregate demand.
B. tax revenues decrease when income increases, intensifying the increase in aggregate demand.
C. the President can increase tax rates whenever he deems such policy appropriate.
D. tax rates can be adjusted by Congress to counteract economic fluctuations.
A. tax revenues increase when income increases, thus offsetting some of the increase in aggregate demand.
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When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to
A) 3. B) 3/7 or 0.4286. C) 1/3 or 0.3333. D) 1/4 or 0.25.
The break-even quantity is
a. Fixed Costs/Price b. Fixed Costs/Marginal Cost c. Fixed Costs/(Price – Marginal Costs) d. Contribution Margin/Fixed Costs
The administrative burden of taxation relates to the a. the disincentive for individuals and businesses to work generate income
b. individuals' cost of preparing tax returns and the government's cost of enforcing tax laws. c. the opportunity cost of social programs. d. the net interest that must be paid on the national debt.
When a nation reduces the barriers to international trade:
A. the total value of all goods and serviced produced by the nation rises. B. the total value of all goods and services produced by the nation falls. C. each individual citizen becomes better off. D. each individual citizen becomes worse off.