The Mayor of Stuckeyville is considering increasing the tax on bowling. He is confident that tax revenues will increase but recognizes the possibility that they may decrease. The mayor is engaging in
A) dynamic tax analysis.
B) static tax analysis.
C) a policy that will cause the tax base to increase.
D) a policy that will cause the tax base to remain unchanged.
Answer: A
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Steven lives in a big city where there is a shortage of parking. He has a parking spot in his driveway where he parks his car. Which of the following statements is most correct?
A) The opportunity cost of using the spot is zero, because Steven owns the house. B) Steven has a lower opportunity cost of owning a car than his neighbor, who must rent a parking spot. C) The opportunity cost of using the parking spot is the price he could charge someone else for using the spot. D) The opportunity cost depends on how much Steven's mortgage payment is.
Money market mutual funds are included in
A) M1. B) M2. C) both M1 and M2. D) neither M1 nor M2.