Loopholes, exemptions, and deductions cause an erosion of the tax base.
Answer the following statement true (T) or false (F)
True
The tax base shrinks when certain types of income or expenditures reduce or are entirely excluded from taxation due to an exemption or deduction.
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The foreign exchange market is the market on which ________ of various nations are traded for one another.
A. stocks and bonds B. international financial securities C. goods and services D. currencies
When the price of a good changes but the price of the only other good bought by a consumer stays constant, his
a. budget line shifts. b. indifference curves shift. c. budget line changes slope. d. indifference curves change slope.
If the purchase and sale of a currently illegal drug (for example, marijuana) were decriminalized, economists would expect
A) an increase in demand and supply of this drug. B) an increase in demand and a decrease in supply of this drug. C) a decrease in demand and an increase in supply of this drug. D) a decrease in demand and supply of this drug.
One million automobiles have a defect that could cause the car to explode; however, only one of those cars will actually explode. Nobody knows which one car it is. When the car does explode, the victim's family will sue the automaker for $1 million and win. The defect costs $2 per car to repair. What does economics predict about the automaker's decision to repair the defect?
What will be an ideal response?