A lump-sum tax is a tax that
A) can be avoided by strategic behavior.
B) does not depend on the actions of the economic agent being taxed.
C) does not depend on the actions of the government.
D) distorts economic decisions.
B
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Goods that are very useful and highly desired are likely to be
A) expensive if they are relatively abundant. B) inexpensive if they are relatively abundant. C) inexpensive if they are relatively rare. D) expensive no matter if they are relatively abundant or rare.
Apples are a normal good, so if the price of an apple increases from 50¢ to 60¢, the quantity of apples demanded decrease because of
A) the substitution effect only. B) the income effect only. C) a change in income. D) the substitution and income effects.
You have 40,000 frequent flier miles. You could exchange your miles for a round trip ticket to Bermuda over spring break. Does that mean your flight to Bermuda would be free? Explain your reasoning
What will be an ideal response?
Banks create money when they
A. add to their reserves in the Federal Reserve Bank. B. accept deposits of cash. C. sell government bonds. D. exchange demand deposits for loans to businesses and individuals.