Evaluate the overall tax incidence of state and local taxes in contrast with federal taxes. In addition, what can be concluded about the overall tax system?
What will be an ideal response?
State and local taxes (with sales taxes playing a big role) seem as a group to be mildly regressive. Federal taxes, dominated by the individual income tax but increasingly affected by the regressive payroll tax, are mildly progressive. The overall system is mildly progressive.
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Suppose monetary policy results in the exchange rate falling. As a result,
A) exports do not change because they are autonomous and imports decrease. B) net exports decrease. C) exports increase and imports increase. D) exports decrease and imports decrease. E) net exports increase.
According to the rational expectations school, _____
a. on average people have very little idea of what to expect from government policy makers b. people form expectations by focusing only on the private sector c. changes in the expected price level shift the aggregate demand curve d. people do not consider likely government policies when forming expectations, choosing to remain rationally ignorant e. people form expectations, in part, by considering the probable future actions of government policy makers