When the government levies a tax where everyone is taxed the same fixed percentage of their incomes, ...

When the government levies a tax where everyone is taxed the same fixed percentage of their incomes, this tax is known as a(n):
 a. regressive tax.
  b. progressive tax.
  c. proportional tax.
  d. excise tax.
  e. luxury tax.

QUESTION 2

Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
 a. airplanes. b. automobiles.
  c. both goods. d. neither good.

QUESTION 3

Classical economic theory predicted that in the long run the economy would experience:
 a. below full unemployment.
  b. rising rate of inflation.
  c. full employment.
  d. idle factors of production.

QUESTION 4

A tax whose impact varies inversely with the income of the person taxed, and poor people have a higher percentage of their income taxed than rich people, is known as a:
 a. regressive tax.
  b. progressive tax.
  c. proportional tax.
  d. flat tax.
  e. tax holiday.

QUESTION 5

A nation benefits from international trade if it:
 a. exports more than it imports.
  b. imports more than it exports.
  c. imports goods for which it is a low opportunity cost producer.
  d. exports goods for which it is a low opportunity cost producer.

QUESTION 6

The French economist Jean-Baptiste Say transformed the equality of total output and total spending into a law that can be expressed as follows:
 a. Unemployment is not possible in the short run.
  b. Demand and supply are never equal.
  c. Supply creates its own demand.
  d. Demand creates its own supply.

QUESTION 7

A tax system in which the tax rate on everyone's first 10,000 of income is 10 percent, the tax rate on everyone's second 10,000 of income is 15 percent, and the tax rate on all income over 20,000 is 25 percent is a(n):
 a. proportional tax.
  b. equitable tax.
  c. head tax.
  d. unit tax.
  e. progressive tax.

QUESTION 8

Following the principle of comparative advantage, specialization:
 a. permits greater levels of total production than would be attained without it.
  b. increases the dependency of countries on trade.
  c. both of the above.
  d. neither of the above.