Compare and contrast a general retail sales tax with a value added tax
What will be an ideal response?
Both taxes have the same tax base. A general retail sales tax is easier to compute, requires less monitoring by the government, is more transparent to taxpayers, and imposes a taxpaying burden of fewer individuals/organizations. A value added tax, on the other hand, makes it easier to avoid double taxation by not requiring wholesale sales to be differentiated from retail sales.
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The opportunity cost of holding money is measured by
A) the interest yield that could have been earned by holding some other asset. B) the liquidity of interest-bearing assets. C) the price of government bonds. D) a dollar.
Subprime mortgages are
A) mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. B) mortgages issued to borrowers with flawed credit histories. C) mortgages which are bundled together by financial institutions and sold to investors. D) government-backed mortgages issued by Fannie Mae and Freddie Mac.