Discuss the three principles of equity applied to taxation in the text
1 . The principle of horizontal equity holds that equally situated individuals should be taxed equally
2 . The principle of vertical equity holds that unequals should be treated unequally.
3 . The benefits principle holds that those who reap the benefits from government services should pay the taxes to obtain the benefits.
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If all of the returns to a resource are in the form of economic rent,
a. the price of that resource is determined exclusively by supply b. the price of that resource is determined exclusively by demand c. the price and quantity of that resource are determined exclusively by supply d. the price and quantity of that resource are determined exclusively by demand e. the equilibrium price is zero
Currencies that are not backed by precious metals of equal value are called:
a. Near money. b. Repurchase agreements. c. Eurodollars. d. Fiat money. e. Legal tender.
Total cost can be divided into two types of costs:
a. fixed costs and variable costs. b. fixed costs and marginal costs. c. variable costs and marginal costs. d. average costs and marginal costs.
An unexpected increase in total spending will cause an increase in GDP:
A. if prices are sticky. B. if prices are fully flexible. C. regardless of whether prices are sticky or fully flexible. D. only if prices are stuck in the long term.