Explain how and why economists might hold different opinions about using a national sales tax.
What will be an ideal response?
Should show a thorough understanding of how and why economists differ. Some economists might claim the sales tax would fall disproportionately on the poor and middle classes. As a result, it would not be fair. Other economists might claim that the tax would be fair because everyone would pay their fair share, based on what they spend rather than what they earn. Economists might also disagree about the model used. Some economists may think that the model should focus on collection costs. Others might believe the model should focus on the policy’s potential to increase savings and economic growth.
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The protection of rights is an all-or-nothing proposition
a. True b. False
If Coke and Pepsi are close substitutes, then if:
a. Coke raises its price, so will Pepsi. b. Coke raises its price, it will not lose customers to Pepsi. c. Pepsi lowers its price, it will not hurt Coke. d. Pepsi lowers its price, so will Coke. e. Coke raises its price, some customers will switch to Pepsi.