Joe earns $100,000 per year. He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000. This tax system is an example of a
A) regressive income tax.
B) negative income tax.
C) progressive income tax.
D) proportional income tax.
A
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According to the hypothesis of New Keynesian inflation dynamics, an increase in aggregate demand brings about
A) initial sluggish adjustment of the price level followed by higher inflation later on. B) initial rapid adjustment of the price level followed by lower inflation later on. C) initial sluggish adjustment of real GDP followed by more rapid real GDP growth later on. D) sluggish growth in real GDP both initially and later on.
To avoid trade restrictions, a U.S. firm moves its final production process to Ireland and then ships the final products to Germany. This is an example of
A) trade deflection. B) trade diversion. C) protectionism. D) rules of origin.