A tax is structured so that the tax as a percentage of income declines as the level of income ...

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):
 a. flat tax.
  b. regressive tax.
  c. progressive tax.
  d. excise tax.

QUESTION 2

The Keynesian view stresses that:
 a. demand creates its own demand.
  b. there is direct relationship between consumer spending and disposable income.
  c. when aggregate expenditures (demand) can be forever less than full-employment output therefore prolonged unemployment will persist.
  d. all of these are true.

QUESTION 3

Which of the following can be classified as a regressive tax?
 a. Excise tax.
  b. Sales tax.
  c. Gasoline tax.
  d. All of these.

QUESTION 4

A lawyer once said, I could paint my house and fix my plumbing if I just had some technical training and good tools. But, I would rather hire a painter and a plumber. When it comes to fixing a leaking sink, the plumber:
 a. d and e.
  b. charges more per hour than the lawyer does.
  c. charges less per hour than the lawyer does.
  d. is more efficient.
  e. has a comparative advantage.

QUESTION 5

Keynes once remarked that, in the long run, we're all dead. He was responding to the conventional wisdom of classical economics who argued that:
 a. the supply curve should remain vertical in the long run.
  b. World War I was fought to free Britain from economic ruin.
  c. depression was only a short-run, temporary departure from full-employment equilibrium.
  d. funeral plots need to be determined by the market.
  e. market-based realities cause the estate tax to be too high.

QUESTION 6

Jose pays a tax of 24,000 on his income of 60,000 . while Richard pays a tax of 3,000 on his income of 30,000 . This tax is:
 a. a flat tax.
  b. progressive.
  c. proportional.
  d. regressive.

QUESTION 7

The average National Basketball Association player is over 6 feet tall. The average horse jockey is shorter than 5 1/2 feet tall. This is because height provides NBA players with:
 a. d and e.
  b. an absolute advantage for horse racing.
  c. an absolute disadvantage for other sports in general.
  d. a comparative disadvantage in horse racing.
  e. a comparative advantage in basketball.

QUESTION 8

The dominant school of thought prior to the 1930s was known as the:
 a. Keynesian school.
  b. classical school.
  c. rational expectations school.
  d. supply-side school.
  e. monetarist school.