The 1981 tax reform act reduced taxes on high-income individuals. Many economists believed that high tax rates would deter high-income individuals from working and investing, thus slowing the growth of income. This illustrates the issue of
a. the equality-efficiency trade-off.
b. usury.
c. the effects of budget deficits on future generations.
d. the cost disease of the public sector.
e. the importance of externalities.
a
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Reserve requirements are the
A) minimum percentages of deposits that banks must hold as reserves. B) minimum amount of an owner's financial resources that must be placed in a depository institution. C) rules covering the types of deposits that banks may offer. D) rules covering the types of assets that banks may purchase.
If electric utilities continually reduce their emissions of sulfur dioxide
A) the utilities will eventually be forced to go out of business. B) the marginal cost of further emissions will rise. C) the marginal benefit of additional emissions will rise. D) the total benefit of sulfur dioxide emissions will fall.
In principle, prorationing could lead to more efficient extraction of oil from the ground
Indicate whether the statement is true or false
A positive cross price elasticity of demand between two goods suggests that the goods are
A) not related. B) complements. C) substitutes. D) both of unitary elasticity.