Loopholes reduce the efficiency of the tax system
a. True
b. False
Indicate whether the statement is true or false
True
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Decisions regarding purchases and sales of government securities by the Fed are made by the
In the case of a positive externality, in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.
A. tax; external costs B. tax; external benefits C. subsidy; external costs D. subsidy; external benefits E. subsidy; private costs
Inflation is measured by an increase in:
a. homes, autos and basic resources. b. prices of all products in the economy. c. the consumer price index (CPI). d. none of these.
If a tax shifts the supply curve downward (or to the right), we can infer that the tax was levied on
a. buyers of the good. b. sellers of the good. c. both buyers and sellers of the good. d. We cannot infer anything because the shift described is not consistent with a tax.