Consider the following methods of taxing a corporation's income:
a. A flat tax, as opposed to a progressive tax, is levied on corporate profits.
b. A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits. The shareholder would then be required to include this amount as taxable income for her personal income tax. The corporation does not pay a tax.
c. A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains.
Which of the methods above would avoid double taxation?
A) a, b, and c B) a and b only C) a and c only D) b and c only
D
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What triggers exit in a competitive market? Describe the process that ends further exit
What will be an ideal response?
Game theory is:
A. the study of how people behave strategically under different circumstances. B. used by economists to evaluate behavior in a variety of settings. C. a useful tool in predicting strategic behavior. D. All of these statements are true.
Which of the following is an example of a normative economic statement?
a. The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices. b. The economy grew at an annual rate of 5 percent during the first quarter of this year. c. If two automobile companies merge, it is likely that the price of automobiles will rise. d. An increase in international trade benefits some workers but hurts others. e. The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.
If a disequilibrium occurs in the foreign exchange market, what are possible solutions? Why might governments choose not to let the price of their currencies adjust to clear the market?