Explain whether or not the ability-to-pay principle of tax equity is consistent with the benefits received principle of taxation.
What will be an ideal response?
Ability-to-pay assesses a higher tax on the wealthy, typically with progressively higher marginal tax rates. Benefits received make those who receive more government benefits pay a higher tax. It is often the poor who receive more benefits, leading to a burden opposite of the ability-to-pay principle.
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An advantage monetary policy has over fiscal policy is that monetary policy
A) can be quickly changed and implemented. B) is coordinated with fiscal policy. C) is approved by the president of the United States. D) affects consumption expenditure and investment without impacting international trade. E) has no multiplier effects.
How does an increase in the price level affect the aggregate quantity of goods and services demanded?
What will be an ideal response?
Exhibit 5-4 Gross domestic product data National income accountBillions ofdollars Depreciation$ 800 Net interest1,500 Compensation of employees4,000 Profits1,000 Rental income 100 Indirect business taxes 600 Consumer purchases1,000 As shown in Exhibit 5-4, national income (NI) is:
A. $6,000 billion. B. $6,600 billion. C. $7,200 billion. D. $8,000 billion.
Happy Tots Child Care Units of Labor per WeekOutput per WeekMarginal Product per Week144295313441635182 Price of a unit of output: $150 per week.Cost to Happy Tots of hiring one more unit of labor: $400 per week.Table 16.1 Refer to Table 16.1. What is the marginal revenue of the third unit of labor?
A. $1,200 B. $450 C. $600 D. $300