Vertical equity states that taxpayers with a greater ability to pay taxes should
a. contribute a decreasing proportion of each increment in income to taxes.
b. contribute a larger amount than those with a lesser ability to pay.
c. be less subject to administrative burdens of a tax.
d. be less subject to tax distortions that lead to deadweight losses.
b
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If GDP calculations included measurements of pollution and environmental damage, GDP values would most likely be
A) unchanged from their values without these measurements. B) meaningless, since GDP values without these measurements would no longer be of value. C) greater than their values without these measurements. D) less than their values without these measurements.
In the consumption function model, the 45-degree line represents where
A) the real disposable income is equal to zero. B) planned real saving is equal to zero. C) planned real consumption spending is equal to zero. D) planned real saving is greater than actual real savings.