Explain why a comprehensive tax reform that aims to eliminate loopholes while promising to lower rates for everyone is the best opportunity for an efficiency-enhancing tax reform
What will be an ideal response?
The biggest obstacle to efficiency-enhancing tax reform is special interests. Special interests worked very hard to have those tax loopholes enacted into law and will lobby hard against their elimination. Many individuals will lose some special benefit by the elimination of loopholes but everyone will benefit by the lowering of tax rates. In fact, this could be a Pareto superior move.
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A firm that has a great deal of control over the price of a good is said
A) to function in a black market. B) to create a tax incidence. C) to have monopoly power. D) to be in an antitrust position.
What is typically not considered a characteristic of a central bank?
a. The bank backs its currency with gold or silver. b. The bank has considerable control over the stock of money and uses this control to moderate fluctuations in credit conditions and prices. c. The bank regulates other banks. d. The bank lends a lot of money to the government. e. The bank serves as a lender of last resort to other banks by lending them money when no one else will.
Members of the Board of Governors of the Federal Reserve System are
A. elected by member banks to serve four-year terms. B. appointed by Congress for 14-year terms. C. appointed by the president for 14-year terms. D. appointed by the Supreme Court for lifetime terms.
For economists, the word "utility" means:
A. versatility and flexibility. B. rationality. C. pleasure or satisfaction. D. purposefulness.