Chapter 30: Problem 37
Why are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?
Chapter 30: Problem 37
Why are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?
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Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
Suppose that gifts were taxed at a rate of \(10 \%\) for amounts up to \(\$ 100,000\) and \(20 \%\) for anything over that amount. Would this tax be regressive or progressive?
What would happen if contractionary fiscal policy were implemented during an economic boom but, due to lag. it did not take effect until the economy slipped into recession?
Excise taxes on tobacco and alcohol and state sales taxes are often criticized for being regressive. Although everyone pays the same rate regardless of income, why might this be so?
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