Consider two people, Sandy Ross, who earns $25,000, and Gary Belcher, who earns $50,000. If the flat-tax rate is 20 percent, then:
A. the government collects a total of $20,000.
B. Gary pays twice the tax amount Sandy pays.
C. Gary pays three times the tax amount Sandy pays.
D. Gary and Sandy pay exactly the same tax amount.
Answer: B
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If supply and demand both increase, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. uncertain; higher B. higher; higher C. lower; lower D. lower; uncertain
A difference between a proprietorship and a partnership is that
A) a proprietorship is easy to form while a partnership is hard to form. B) a proprietorship has only one owner while a partnership has only two owners. C) a partnership allows for specialization while a proprietorship does not. D) the profits in a proprietorship are taxed only once while in a partnership they are taxed twice.
What are economies of scale?
a. decreasing average costs as production increases b. increasing average costs as production increases c. increasing fixed costs as production increases d. none of the above
For a country with flexible exchange rates, if a nation's interest rate rose, what effect would this have on its current account balance?
a. No effect because interest has no effect on the current account. b. Increase it because foreign capital flows would be attracted to the nation thereby building economic strength. c. Decrease it because the exchange rate will appreciate. d. Increase it because the exchange rate will depreciate. e. Decrease because the exchange rate will depreciate.