The theory that government borrowing may function like an increase in taxes is known as
A. the Ricardian equivalence theorem.
B. Congressional Tax policy.
C. the marginal propensity to consume.
D. planned tax policy.
Answer: A
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A tax on productive activity tends to
a. increase formal market activity because it decreases prices b. decrease formal market activity because it increases work incentives c. decrease formal market activity because it lowers the return on such activity d. decrease activity in the underground economy because people are afraid of being connected with tax fraud e. increase activity in the underground economy because people are afraid of being connected with tax fraud
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
a. Ability-to-pay b. Inexpensive-to-collect c. Fairness of contribution d. Benefits-received