If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:
A. progressive tax.
B. poll tax.
C. proportional tax.
D. regressive tax.
Answer: D
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Which of the following is an appropriate policy for a central bank to follow if the economy is plagued with deflation?
A) using contractionary monetary policy to drive up interest rates B) gradually raising the required reserve rate C) increasing the target interest rate on overnight loans D) consistently pursuing policy to promote the credibility of the central bank
One reason why producers have an incentive to organize in favor of protection is because
A) producer gains are spread across so many firms that no one gets a large share of the benefits. B) producer gains are relatively concentrated. C) there is no real cost to the economy. D) producer gains outweigh consumer losses. E) it is a cheap way to keep their employees happy.
If a profit-maximizing, perfectly competitive firm is making only a normal profit in the short run, then the firm is in:
a. disequilibrium. b. equilibrium where MR exceeds minimum ATC. c. equilibrium where MR equals minimum AVC. d. equilibrium where P = AFC. e. equilibrium where P = ATC
If the nominal interest rate is 4 percent and the real interest rate is -2.5 percent, then the inflation rate is
a. -6.5 percent. b. -1.5 percent. c. 1.5 percent. d. 6.5 percent.