Steve Forbes has run for president twice on a program of a "flat tax." Under a flat tax, there would be only one tax bracket for the federal income tax and most tax deductions and tax exemptions would be eliminated
Suppose that Forbes wins the 2016 presidential election. What would be the likely impact on the market for municipal bonds?
If interest on municipal bonds were no longer exempt from the federal income tax, the prices of municipal bonds would fall and their yields would rise. Reducing the marginal tax rate on high income tax payers—as would be done under most flat tax proposals—would reduce the incentive many high income people have for buying municipal bonds. This would also result in a decline in the prices of these bonds and a rise in their yields.
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A fishery is typically identified by:
A. location and size. B. location and species. C. species and size. D. species and market value.
Purchases of Huggies diapers should
A) remain fairly constant over the business cycle. B) increase in recessions and decrease in expansions. C) decrease in recessions and increase in expansions. D) increase in recessions and remain constant in expansions.
Given the production function and total cost function shown in Chapter 4, as production increases, total costs
A. decrease constantly. B. decrease for a while and then increase. C. increase for a while and then decrease. D. increase constantly.
Neoclassical economics and behavioral economics disagree on the following assumptions, except:
A. Rationality of people B. Determinants of prices C. Stability of people's preferences D. Strength of people's willpower