The principle of horizontal equity is violated if two people who earn the same amount of income actually pay a different amount in taxes.
Answer the following statement true (T) or false (F)
True
Horizontal equity is achieved when those who earn equal amounts of money pay the same amount in taxes; when this is not the case, there is horizontal inequity.
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Monopolistic competition is characterized by
a. one firm selling several products. b. many firms selling the same product. c. many firms selling slightly different products. d. one firm selling one product.
Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's risk level falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro. b. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro. c. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro. d. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
Suppose a small closed economy has GDP of $5 billion, consumption of $3 billion, and government expenditures of $1 billion. Then investment and national saving are both $1 billion
a. True b. False Indicate whether the statement is true or false
Discuss some of the reasons why monopoly power is considered undesirable.
What will be an ideal response?