Discuss the thought process of the owners of a new business with regard to property taxes when deciding where to locate. Will they always locate where property taxes are lowest? Why or why not?
What will be an ideal response?
When deciding where to locate a new business, business owners typically have their choice of several sites and thus can choose among various locations. While high property taxes create a disincentive to improve upon property, property taxes are used to provide government services. Thus businesses are concerned with whether the property tax covers the value of the services the business will receive from government. In other words, they will not always locate where property taxes are the lowest. They will locate in communities that have the optimal mix of public sector output at the right property tax "price."
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The production possibilities frontier illustrates
a. the trade-off between efficiency and equality. b. the combination of output that an economy should produce. c. the combination of output that each member of society should consume. d. None of the above is correct.
Many banks offer accounts featuring “Automatic Transfer from Savings” allowing customers to overdraw checking accounts and the bank will transfer enough funds to cover the check automatically. Most likely, what is the effect of this feature on velocity?
A. Velocity will decrease. B. Velocity will increase. C. Velocity will remain constant. D. Velocity is unrelated to saving accounts.