Discuss how taxes affect product and input markets
What will be an ideal response?
Taxes change behavior, and changes in behavior can affect supply and demand in markets, causing prices to change. When prices change in input markets or in output markets, some people may be made better off and some worse off. These final changes determine the ultimate burden of a tax.
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When costs are uncertain, a government might use a _____ contract, where the government pays the cost of the project plus an additional amount
a. fixed fee b. cost plus fixed fee c. cost plus percentage fee d. cost plus incentive fee
Which of the following is true?
a. The United States is rich because it has democratic political institutions. b. Economic growth is primarily the result of gains from trade, discovery of better ways of doing things, and capital investment. c. Without foreign aid, poor countries are unable to break the cycle of poverty, low savings and investment, and economic stagnation. d. Most all countries with an abundance of natural resources have been able to achieve rapid growth and high levels of per capita income.