What do economists mean by an efficient tax?
What will be an ideal response?
A tax is efficient if it imposes a small excess burden relative to the tax revenue it raises.
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"Given the long run implication of Solow's growth model with respect to the rate of savings, the low savings rate in the United States is not a problem." This statement overlooks that over time it appears that
A) total factor productivity and the growth rate of capital per person are positively related. B) total factor productivity and the growth rate of capital per person are inversely related. C) total factor productivity and the difference between the growth rates of capital per capita and population are not related a and k - n are not related. D) savings rates and per capita growth rates are inversely related.
In the Keynesian model with a fixed money wage but a flexible price level, an increase in taxes will lower
a. output and the price level, but leave the interest rate unchanged. b. output, the price level and the interest rate. c. output and the interest rate, but leave the price level unchanged. d. output and the price level, but increase the interest rate. e. the price level and the interest rate, but leave output unchanged.