Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case
A) the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle.
B) the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle.
C) neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.
D) both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor.
D
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In the classical model
A) a decrease in aggregate demand will lead to a decrease in the price level and a decrease in real GDP. B) changes in aggregate supply leave real GDP unchanged. C) a decrease in aggregate demand will lead to an increase in the price level and a decrease in real GDP. D) changes in aggregate demand affect only the price level, not real GDP.
Who would most likely lobby Congress for a price support on wool?
a. retail sweater outlets b. consumers of wool caps c. taxpayers d. wool producers e. sheep