Which of the following statements is not correct?
a. All states have state income taxes, but the percentages vary widely.
b. Sales taxes and property taxes are important revenue sources for state and local governments.
c. Medicare spending has increased because the percentage of the population that is elderly and the cost of healthcare have both increased.
d. A budget deficit occurs when government spending exceeds government receipts.
a
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If the marginal benefit from water pollution abatement increases, then it is efficient to:
A. reduce water pollution to zero. B. allow more water pollution. C. let the market determine water pollution. D. reduce water pollution further, but maybe not to zero.
The government increases the corporate profits tax. As a result, corporate profits decrease. This will
A. decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease or increase depending on the relative magnitude of the income and substitution effects. B. decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease. C. have no effect on households. D. decrease the nonlabor income of households, causing consumption to decrease and labor supply to increase.