Why are lump-sum taxes regressive in nature?
What will be an ideal response?
Lump-sum taxes require each individual to pay the same amount in taxes. Therefore, low-income households need to pay a higher percentage of their income as taxes than do high-income households. Therefore, lump-sum taxes are regressive in nature.
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Growth accounting refers to the method used to
A) identify the contribution of economic growth from increased capital, labor, and technological progress. B) measure growth in the capital stock. C) measure the growth in the labor force. D) identify the costs of promises made by the government today but paid for by future generations.
Which of the following is true about time lags and fiscal policy? a. Changes in federal taxes can be implemented easily by the President without the approval of Congress
b. Changes in fiscal policy that involves changes in government spending on public works projects do not involve significant time lags. c. Once an appropriate fiscal policy has been determined it can be implemented quickly. d. The lag time between when a fiscal policy is needed and when it is actually implemented is considerable.
Which of the following is true? a. At the natural rate of unemployment, the economy is considered to be at full employment
b. At full employment, the economy is producing at its potential output. c. If unemployment is greater than its natural rate, the economy is producing at less than its potential output. d. All of the above are true.
Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,
a. nominal GDP is $400, real GDP is $500, and the GDP deflator is 80. b. nominal GDP is $400, real GDP is $500, and the GDP deflator is 125. c. nominal GDP is $500, real GDP is $400, and the GDP deflator is 80. d. nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.