What are the two important programs in practice in America that strongly resemble a negative income tax?
What will be an ideal response?
1. Food Stamps program: Food Stamp benefits decline as earnings rise, and Food Stamps are used like cash in many poor neighborhoods.2. Earned Income Tax Credit (EITC): As earnings rise from zero to some threshold, the federal government supplements the earnings of the working poor by giving them what amounts to a grant that is proportional to their earnings. But once earnings pass a second threshold, the government starts taking this grant back, just as a NIT would.
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How would the economy of Canada be likely to be characterized?
a) free market b) centrally planned c) mixed, but on the side of centrally planned d) mixed, but on the side of free marker
What type of model would be best if we wanted to analyze the market for fast food? Why?