Vertical equity states that taxpayers with a greater ability to pay taxes should
a. contribute a decreasing proportion of each increment in income to taxes.
b. contribute a larger amount than those with a lesser ability to pay.
c. be less subject to administrative burdens of a tax.
d. be less subject to tax distortions that lead to deadweight losses.
b
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The infant industry argument is that
A) comparative advantage is irrelevant to economic growth. B) developing countries have a comparative advantage in agricultural goods. C) developing countries have a comparative advantage in manufacturing. D) developing countries have a potential comparative advantage in manufacturing. E) developing countries have no chance to compete with industrialized countries.
Using statistical models to estimate the maximum losses a portfolio's value is likely to sustain over a particular time period is called:
A) gap analysis B) duration analysis C) value-at-risk approach D) credit-risk analysis
Assuming an economy starts in long-run equilibrium, if the aggregate demand curve were to decrease:
A. prices in the economy would increase. B. output in the economy would increase. C. the short-run aggregate supply curve would shift left. D. the long-run effect would be a lower price level.
Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products
a. True b. False Indicate whether the statement is true or false