Which of the following are arguments against taxing unrealized capital gains?
a. A person might have to sell an asset in order to pay the tax on it.
b. It might be difficult to determine the increase in valuation.
c. It increases the incentive to hold onto appreciated assets.
d. a and b
e. b and c
d
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If the Fed were to announce that fighting inflation is not a high priority for the immediate future ________
A) households might expect higher inflation B) the short run aggregate supply would shift upwards C) firms might begin raising their prices to keep up with expected inflation D) all of the above E) none of the above
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes charges different price in the morning and in the afternoon, then what will be its daily economic profit?
A. $32 B. $27 C. $33 D. $39