Under the current federal income tax laws, a person who has a high income is likely to
A. receive a substantial benefit from the earned income tax credit.
B. spend a larger fraction of total income than a low-income taxpayer.
C. pay a larger percentage of income in taxes than the average taxpayer.
D. pay a smaller percentage of income in taxes than the average taxpayer.
Answer: C
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Rising inflation causes quantity demanded to decline, because ________
A) the central bank raises the nominal interest rate by more than the increase in expected inflation B) households and businesses are reluctant to spend when prices rise C) higher inflation causes the IS curve to shift to the left D) all of the above E) none of the above
A practice whereby a seller charges different prices to different consumers of the same product or service is called
a. price discrimination. b. oligopolistic pricing. c. stay-out pricing. d. monopolistic pricing.
A country tends to grow faster when?
A. Greater proportion of its work force graduate from college. B. It trades less with the rest of the world. C. The government restricts direct foreign investment into others. D. Saving and investing decrease. E. The Stock of fiscal capital is held constant.
Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?
A. The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government. B. Domestic production will be higher with the quota than with the tariff. C. The price of grain under the quota will be higher than the price under the tariff. D. The price of grain under the tariff will be higher than the price under the quota.