Dynamic tax analysis generally predicts
A) that the higher the tax rate is, the higher the tax revenue will continue to be into the future.
B) that the higher tax rates lead to higher revenues only to a point at which revenues will begin to decrease due to a diminishing tax base.
C) that lower tax rates will always and continuously lead to increased tax revenues.
D) that lower tax rates are always going to lead to decreased tax revenues.
Answer: B
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Less money means ________ interest rates, which ________ spending
A) lower; stimulates B) lower; reduces C) higher; stimulates D) higher; reduces
The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. If a sales tax on sellers of the good is imposed, the tax is paid by
A) only buyers. B) only sellers. C) both buyers and sellers. D) neither buyers nor sellers.
Which of the following is true of an improvement in technology? a. An improvement in technology shifts the per-worker production upward
b. An improvement in technology shifts the per-worker production downward. c. An improvement in technology increases the concavity of the production possibilities frontier. d. An improvement in technology decreases the concavity of the production possibilities frontier. e. An improvement in technology increases the quantity of input in the production process.
An advantage of pollution taxes that is NOT offered by command-and-control policies is that:
A. with a pollution tax, zero pollution is produced. B. a pollution tax decreases the price of the polluting good. C. with a pollution tax, firms have flexibility in their choice of strategies to use to clean up pollution. D. a pollution tax decreases the demands for goods that cause pollution.