The federal income tax is consistent with the __________ principle of taxation, whereas an excise tax on sporting event tickets is consistent with the ___________ principle of taxation
A. benefits-received; ability-to-pay.
B. benefits-received; pay-as-you-go.
C. ability-to-pay; benefits-received.
D. ability-to-pay; pay-as-you-go.
Answer: C
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The practice of borrowing short and lending long
A) pools risk. B) minimizes the cost of monitoring borrowers. C) creates liquidity. D) All of the above answers are correct.
Which of the following occurs as the economy moves rightward along a given IS curve?
A) A reduction in the interest rate causes investment spending to decrease. B) A reduction in the interest rate causes money demand to increase. C) A reduction in the interest rate causes a reduction in the money supply. D) An increase in government spending causes a reduction in demand for goods. E) A reduction in taxes causes a reduction in demand for goods.