The basic idea behind a negative income tax is to
A. help local government agencies deliver more services to the poor.
B. increase the in-kind income of the poor.
C. help the poor get job skills.
D. help the poor without destroying incentives to work.
Answer: D
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In a given year, a country's GDP = $3843, net factor payments from abroad = $191, taxes = $893, transfers received from the government = $422, interest payments on the government's debt = $366, consumption = $3661, and government purchases = $338
Calculate the values of private saving, government saving, and national saving.
In the above figure, if the economy is in equilibrium at E1, then
A) the economy is producing below its potential long-run equilibrium at full employment. B) the economy is producing above its potential long-run equilibrium at full employment. C) there is an inflationary gap in the economy. D) the economy is in a period of high inflation.
When externalities cause markets to be inefficient,
a. government action is always needed to solve the problem. b. private solutions can be developed to solve the problem. c. given enough time, externalities can be solved through normal market adjustments. d. there is no way to eliminate the problem of externalities in a market.
According to the shortsightedness effect, politicians tend to favor projects with:
a. long-run benefits and long-run costs. b. short-run benefits and short-run costs. c. short-run benefits and long-run costs. d. long-run benefits and short-run costs.