In 2009, President Obama proposed raising the income tax on those making over $250,000 per year. Discuss the merits of this plan.
What will be an ideal response?
The debate is still ongoing. Some argue that this group creates jobs and is comprised of small
business owners. Increasing taxes will stall job creation and thus slow the economy. Others
argue that increases would be minimal and would lead to greater wealth creation for all and
thus stimulate the economy.
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Refer to Figure 8.3. Holding other variables constant, a decrease in households' wealth accompanied by an increase in the capital stock will definitely result in
A) an increase in the equilibrium quantity of labor. B) a decrease in the equilibrium quantity of labor. C) an increase in the equilibrium real wage. D) a decrease in the equilibrium real wage.
What is one reason a gambler might bet $1,000 that a team that is ranked sixteenth will win the NCAA basketball tournament?
A) irrationality B) overconfidence C) exuberance D) gambler's fallacy