Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers. As a result,
A) individuals are encouraged to want generous health coverage that reduces their incentives to cut costs.
B) the quality of health care provided is less than it would be if benefits were taxed.
C) politicians are encouraged to raise income and payroll taxes.
D) the federal government spends more than it receives in tax revenue.
A
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If the Fed's policies aim to increase aggregate demand, the Fed must fear
A) recession. B) a supply shock that increases aggregate supply. C) a supply shock that decreases potential GDP. D) stagflation. E) inflation.
Compare the effect on the price level and real GDP of a decrease in tax rates assuming a supply-side effect versus no supply-side effect
Compared to no supply-side effect, including a supply-side effect for the decrease in tax rates will cause the price level to increase ________ and real GDP to increase ________. A) more; less B) less; less C) more; more D) less; more
If the price of a good increases by 10 percent, its quantity demanded drops by 50 percent. The price elasticity of demand is:
A. 1.0 B. 0.2 C. 5.0 D. 2.0
The Temporary Aid to Needy Families (TANF) program:
A. requires that recipients participate in work activities. B. is associated with a decrease in single mothers working. C. has caused a rise in national welfare caseloads. D. was an important factor in the increase in poverty among children between 1993 and 2002.