There are no arguments in favor of inheritance taxation on efficiency grounds, only on equity grounds
a. True b. False
b
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High budget deficits may:
a. encourage overly expansionary fiscal policy. b. create higher inflation. c. increase the risk of sovereign debt default. d. all of the above.
Which of the following would be most likely to improve the standard of living of people in less-developed nations?
a. the development of strong labor unions b. an increase in foreign investment c. an increase in the share of the population under fifteen years of age d. higher tariffs and the imposition of other restraints designed to restrict international trade
How does the new classical theory of fiscal policy differ from crowding-out model?
Refer to Scenario 9.10 below to answer the question(s) that follow. SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.Refer to Scenario 9.10. In the short run, if the cafe decides to stay open, it will make weekly operating profits of
A. -$2,800. B. $0. C. $2,800. D. $5,400.