A proportional income tax means that those with a higher income pay
A. a higher percentage of their income in taxes than low-income people.
B. the same percentage of their income in taxes as low-income people.
C. a lower percentage of their income in taxes than low-income people.
D. all the taxes in the economy.
Answer: B
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An example of a consumption tax is
A) an income tax. B) transfer payments. C) the Social Security tax. D) a sales tax.
The decision about what goods and services will be produced in a market economy is made by
A) consumers and firms choosing which goods and services to buy or produce. B) consumers dictating to firms what they need most. C) workers deciding to produce only what the boss says must be produced. D) producers deciding what society wants most. E) lawmakers in the government voting on what will be produced.
The conventional view among economists is that persistent budget deficits lead to a ________ capital stock and a ________ level of potential GDP in the long run
A) larger; higher B) larger; lower C) smaller; higher D) smaller; lower
As a general rule, if pollution costs are external, firms will produce:
a. too little of a polluting good. b. too much of a polluting good. c. an optimal amount of a polluting good. d. cannot be determined without additional information.