A sustained decrease in the price level is known as deflation.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Suppose fairness is defined as those who receive the greatest benefits from government should pay the most in taxes, then which of the following taxation systems would be consistent with this notion of fairness?
a. User fees for national parks.
b. Gasoline taxes to fund highway maintenance.
c. A tax on the poor to finance food stamps and other low-income assistance programs.
d. All of the above are consistent.
QUESTION 3Compliance with wage and price controls by unions and businesses is strictly voluntary.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4A consumer price index of 110 for a given year indicates that prices in that year are 10 percent higher than prices in the base year.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5At the federal level, the single most important tax, accounting for slightly less than half of revenue, is the:
a. corporate income tax.
b. personal income tax.
c. estate tax.
d. property tax.
e. sales tax.
QUESTION 6Most economists agree that the government should use incomes policies to control inflation during peacetime.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Unlike the GDP deflator, the CPI does not consider goods and services purchased by business and government.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 8The primary source of revenue at the federal level is:
a. the corporate income tax.
b. the personal income tax.
c. property taxes.
d. sales taxes.
e. customs duties.
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