A major criticism of static tax analysis is that it
A) uses only ad valorem taxes.
B) does not use ad valorem taxes.
C) ignores the incentive effects created by higher tax rates.
D) assumes that the tax base will not increase.
Answer: C
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An inflation forecast developed in a Keynesian framework is likely to focus on
A) Federal Reserve policy. B) international gold movements. C) household and business spending decisions. D) the velocity of money.
The term "future value"
A. can be determined by inverting the formula for present value. B. is not used in modern public finance analysis. C. refers to the present value of future money. D. includes the shadow prices of all goods used in a project.
The output losses from an adverse inflation shock are ________ and the output losses from a fall in potential output are ________.
A. large; small B. small; large C. temporary; permanent D. permanent; temporary
Which of the following would not act as an automatic stabilizer?
A) Unemployment insurance B) Government purchases C) Personal income taxes D) Corporate income taxes