What is the relationship between financial market development and economic growth?
What will be an ideal response?
A country's economic growth is linked to financial market development. As the text points out, a country's financial system has to grow as its level of economic activity rises, or the country will stagnate. Economic research has shown that there is strong positive correlation between financial market development and economic growth across countries.
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Why do people refuse to pay for public goods?
What will be an ideal response?
FICA is a payroll tax imposed on employers and workers that is used to fund Social Security and Medicare. Which of the following statements regarding the tax is true?
A) Most economists believe the burden of the tax falls almost entirely on workers. B) Congress wanted the burden of the tax to be greater for employers than for workers. C) Most economists believe the burden of the tax falls mostly on employers. D) Employers are required to pay a greater share of the tax than workers but most economists believe the burden of the tax is shared equally.