The tax wedge is the difference between the
A) amount of taxes needed to pay off the national debt and the actual amount of taxes.
B) nominal and real interest rates.
C) pretax and posttax returns to an economic activity.
D) amount of taxes needed to balance the federal budget and the actual amount of taxes.
C
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The level of potential GDP
A) increases as the real rate of interest decreases. B) increases as the real rate of interest increases. C) is unaffected by the real rate of interest. D) is represented on the IS-MP model by a horizontal line at the world real rate of interest.
If Alex deposits $1,000 from her paycheck into her checking account and, at the same time, increases her credit card balance by $1,500, then her saving is ________, and her wealth ________.
A. +$1,000; decreases by $500 B. -$500; decreases by $500 C. -$500; increases by $2,500 D. +$500; decreases by $1,000