The progressive income tax is a tax based on the
A. ability-to-pay principle.
B. efficiency tax principle.
C. benefits-received principle.
D. tax equity principle.
Answer: A
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A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. C) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease. D) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity.
A bank panic occurs when
A) a bank is worried that its loans will not be repaid. B) an individual bank cannot meet its reserve requirements. C) a bank lacks sufficient funds with which to make loans. D) the situation in which many banks experience a bank run simultaneously.
Which of the following statements about the private production of a public good is true?
a. Private production is not feasible unless government subsidizes it. b. Private production is only possible for pure public goods. c. Private production is always inefficient. d. Private production is provides useful information about consumer preferences.
If an employment situation is characterized by adverse selection, there is an excess supply of underqualified applicants for each job
a. True b. False