The movement of the budget line from BB to bb in the figure suggests that income has:
A. increased and the price of X has decreased.
B. fallen and the price of Y has increased.
C. fallen and the price of Y has decreased.
D. decreased, but there have been no price changes.
B. fallen and the price of Y has increased.
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Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) the unemployment rate is very, very low. B) incomes and profits are rising. C) firms are operating above their normal capacity. D) the economy is below full employment. E) there is pressure on wages and prices to rise.
Which of the following best reflects the ability-to-pay philosophy of taxation?
A. An excise tax on coffee B. An excise tax on gasoline C. A progressive income tax D. A tax on residential property