Grants to provinces that come with conditions

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Unformatted text preview: ” or “standard deduction.” A) $10,000 B) $2,200 C) $1,200 D) $1,800 E) $3,000 10) The Laffer Curve makes the point that A) lowering income tax rates might increase tax revenues. B) per unit taxes are more efficient than lump- sum taxes. C) increasing income tax rates would cause people to work more. D) increasing consumption tax rates would raise saving. E) lump sum taxes are efficient. Page 5 Econ 325 CRN: 14794 Section A01 11) It makes the most sense to tax the rich heavily if A) the rich are highly responsive to taxes. B) the rich are rich due to luck. C) the rich are highly innovative. D) the rich work very hard. E) the rich are very productive. 12) Which of the following statements about tax avoidance is FALSE? A) Tax avoidance imposes no deadweight loss, because people who avoid the tax do not change their behavior. B) Tax avoidance is legal. C) Income splitting (e.g. having one spouse pay salary to the other spouse in a family business), where legal, is a form of tax avoidance. D) Postponing taxes (for example, by contributing to an RRSP) is a form of tax avoidance. E) If the wealthy avoid taxes more effectively than the poor, this makes the tax system less progressive. 13) Which of the following statements about in- kind transfers is FALSE? A) In- kind transfers tend to be easier to target at the poor than cash transfers. B) In- kind transfers tend to require less bureaucracy to administer than cash transfers. C) In- kind transfers tend to give less utility per dollar spent to the recipient than cash transfers. D) In- kind transfers tend to increase consumption of the targeted good (say education) more than cash- transfers. E) In- kind transfers can be used to address certain market failures. 14) Which of the following statements about insurance markets is FALSE? A) Insurance markets tend to be subject to adverse selection. B) Insurance markets tend to be subject to moral hazard. C) Asymmetric information may lead insurance markets to fail. D) Government provision of insurance may improve social welfare. E) Government- provided insurance is not subject to moral hazard. End Section 1 Page 6 Econ 325 CRN: 14794 Section A01 Section 2: True/False/Uncertain—Each question...
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