What are the two important programs in practice in America that strongly resemble a negative income tax?
What will be an ideal response?
1. Food Stamps program: Food Stamp benefits decline as earnings rise, and Food Stamps are used like cash in many poor neighborhoods.2. Earned Income Tax Credit (EITC): As earnings rise from zero to some threshold, the federal government supplements the earnings of the working poor by giving them what amounts to a grant that is proportional to their earnings. But once earnings pass a second threshold, the government starts taking this grant back, just as a NIT would.
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By paying a higher-than-market wage, a firm can avoid the problem of
a. reputation as hostage b. moral hazard c. the winner's curse d. adverse selection e. symmetrical information
If your bank receives a demand deposit of $4,000 and the legal reserve requirement is 20 percent, then it can make additional loans of
a. $800 b. $3,200 c. $4,000 d. $16,000 e. $20,000
To prevent demand-pull inflation...
What will be an ideal response?
The production of information products is characterized by
A. relatively low fixed cost. B. diseconomies of operation. C. relatively low marginal cost. D. an upward sloping marginal cost curve.