A tax that is designed to be progressive will improve
A. Efficiency.
B. Vertical equity.
C. Equality.
D. Horizontal equity.
Answer: B
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A cost paid in money is
A) not an opportunity cost. B) an implicit cost and an opportunity cost. C) an explicit cost and an opportunity cost. D) not an accounting cost. E) an explicit cost but not an opportunity cost.
If demand decreases and supply increases
A) the market clearing price will decrease, and the equilibrium quantity will increase. B) the market clearing price will decrease, and equilibrium quantity will decrease. C) the equilibrium quantity will decrease, but the change in the market clearing price cannot be determined without more information. D) the equilibrium price will decrease, but the change in the equilibrium quantity cannot be determined without more information.
If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1 percent, quantity demanded decreases by:
A. 4 percent. B. 0.5 percent. C. 1 percent. D. 2 percent.
With a nominal interest rate of 4%, an expected inflation rate of 1%, and interest income taxed at a rate of 25%, what is the expected real after-tax interest rate?
A. 3% B. 1% C. 0% D. 2%