Why is it unlikely that tax increases will be the way to eliminate current U.S. federal budget deficits?
A) The revenues generated by increasing taxes on the rich would only pay for a small portion of the federal budget deficit in any recent year.
B) Increasing every worker's taxes by the same amount could eliminate the deficit, but it is likely this action would be viewed as too burdensome for workers with modest incomes.
C) Since World War II, on average when taxes were increased by a dollar, federal government spending increased by that much and more.
D) All of the above.
D
You might also like to view...
Critics of the "limits to growth" thesis argue that:
A. clean air and water is a luxury good and the more economically developed a country becomes the easier it will be to keep the environment clean. B. economic growth will always take the form of more of what we have now, rather than newer, better, and cleaner goods and services. C. the market is not capable of adjusting to shortages of resources. D. government action spurred by political pressure is the best way to avoid the depletion of natural resources and pollution of the environment that results from economic growth.
To compare the GDP of countries with different currencies, it is necessary to convert to a “common denominator” often referred to as _______.
a. purchasing power parity (PPP) b. exchange rate c. GDP per capita d. GDP
Suppose Congress raises taxes and the monetary authorities slow the annual money supply growth from 10 percent to 5 percent. If decision makers accurately anticipate the impact of these policy changes on prices,
a. unemployment will rise. b. unemployment will fall. c. there will be no effect on unemployment. d. unemployment will fall if the change in monetary policy dominates, but unemployment will rise if the change in fiscal policy dominates.
World output of goods and services increases with specialization because
A. Each country's workers are willing to work harder than they did before specialization. B. The world's workers are more educated than before specialization. C. Each country's production possibilities curve shifts rightward. D. The world's resources are being used more efficiently.