Under a negative income tax system, people can make payments to or receive them from the IRS.

Under a negative income tax system, people can make payments to or receive them from the IRS.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

One way to measure national debt over time is relative to:
 a. the cash flow of the banking system.
 b. the economy's production and income.
 c. credit sales of consumer durables over a year.
  d. national home sales in large cities.
 e. the economy's savings.

QUESTION 3

Suppose an economy had an inflation rate of 7 percent last year. This has decreased to 6 percent this year. This means that the economy is:
 a. suffering from hyperinflation.
 b. experiencing deflation.
 c. experiencing disinflation.
 d. experiencing a wage-price spiral.
 e. experiencing a decrease in real wage.

QUESTION 4

Negative income tax plans have the disadvantage of decreasing work incentives in comparison to existing welfare programs without work incentives.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

In 2015, the U.S. gross national debt was _____.
 a. about 1 million
  b. about 1 billion
 c. 1 trillion
 d. 3 trillion
 e. about 18 trillion

QUESTION 6

If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____.
 a. nominal income declines and real income increases
 b. both nominal income and real income increase by 5 percent
 c. nominal income increases and real income declines
 d. both nominal income and real income decrease by 5 percent
 e. nominal income increases by 5 percent and real income is unchanged

QUESTION 7

If a negative income tax system were implemented, then the poor would have no incentive to find work.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 8

Which of the following is not included in the calculation of federal debt?
 a. Debt held by banks
 b. Debt held by firms
 c. Debt held by the U.S. Treasury
  d. Debt held by households
 e. Debt held by foreign entities

QUESTION 9

A decrease in a person's real wage necessarily means:
 a. lower purchasing power.
 b. a lower nominal wage.
 c. a lower personal disposable income.
  d. a higher nominal wage.
 e. a higher personal disposable income.