Why do some economists think that taxing capital gains results in a locked-in effect?
What will be an ideal response?
Investors may be reluctant to sell stocks that have substantial capital gains.
Economics
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Mergers harm society
A) True. Firms merge to avoid antitrust laws and increase their prices. B) Maybe. It depends on whether the effect on prices is larger from reducing competition or increasing efficiency. C) False. Firms gain economies of scale and pass the price savings on to their customers. D) True. Total surplus is reduced when firms merge.
Economics
Most economists believe that the best monetary policy target is
A) an interest rate. B) the money supply. C) total bank reserves. D) the discount rate.
Economics