Why do many economists rate the income tax high in efficiency and equity terms?
The income tax could potentially reduce labor supply, but in fact the effect is likely to be small. Thus the tax is relatively efficient. (The effect on reducing savings is also thought to be small.) The tax can be made as progressive as society wishes, so it also scores high on equity grounds.
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An intersection known as Four Corners lies 300 miles from the nearest town. At this intersection are three independently owned gas stations and one small pharmacy. Which of the following is true?
a. The firms are all perfectly competitive because of their size. b. It would be easier for all four firms to form a cartel than for only the gas stations to do so. c. The gas stations are monopolistically competitive because there are so few of them that they are almost monopolists. d. The gas stations are perfectly competitive; the pharmacy is not. e. The gas stations are oligopolists; the pharmacy is a monopolist.
Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead
a. True b. False Indicate whether the statement is true or false
Fluctuations around the long-run aggregate supply curve are:
A. experienced as expansions, recessions, and recoveries. B. called the business cycle. C. normal for an economy. D. All of these are true.
An interest rate spread is the difference between an interest rate on a risky asset and the corresponding interest rate on a risk-free treasury security.
Answer the following statement true (T) or false (F)