To rise and quantity to fall. And quantity to rise. To fall and quantity to rise
ID: 1217987 • Letter: T
Question
To rise and quantity to fall. And quantity to rise. To fall and quantity to rise. And quantity to fall. Important microeconomic consequences of inflation include all of the following except: Cyclical unemployment. Income effects. Wealth effects. Price effects. If an engineering professor makes $90, 000 and pays $6,000 in taxes while a political science professor makes $50, 000 and pays $7,000 in taxes, this is an example of: A progressive tax system. Vertical inequity. Constant marginal tax rates. Horizontal inequity. Which of the following is a microeconomic consequence of inflation? Greater unemployment. Money illusion. The wealth effect. All of the above. If an individual is taxed at a 17 percent rate for each extra dollar earned, the reference is to the: Marginal tax rate. Nominal tax rate. Average tax rate. Effective tax rate.Explanation / Answer
10. Option A is correct.
Cyclical unemployment occurs due to different phases of the trade cycle. When the economy expands during boom, the unemployment falls and during recession it increases.
11. Option B is correct.
Vertical inequality is one when individuals with higher earnings are not taxed more or the tax is not progressive.
12. Option D is correct.
As per the Phillips curve, there is a negative relation between the inflation rate and the level of unemployment.
Money illusion means the belief that money has a fixed value of purchasing power over time or the value remians the same.
Wealth of a consumer is affected with the rate of inflation in the economy.
13. Option A is correct.
Marginal tax is the tax that is levied on the per dollar increase in income.
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