A progressive tax is such that:
A. tax rates are higher the greater one's income.
B. the same tax rate applies to all income receivers, so that the rich pay absolutely more
taxes than the poor.
C. entrepreneurial income is exempt from taxation.
D. the revenues it yields are spent on transfer payments.
Answer: A
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Which of the following is not an example of the law of supply?
(A) A furniture manufacturer raises the price and increases the number of sofas it produces. (B) More consumers are buying sofas than ever before. (C) A furniture store raises the price of its sofas since they can sell more. (D) A competitor produces more sofas after the price is raised.
At __________ income levels on the LM curve, the interest rate must be __________
A) higher; lower B) lower; higher C) higher; unchanged D) higher; higher