When Policymakers Impose Price Controls, They

question 115

Multiple Choice

When policymakers impose price controls, they

• A) are usually following the advice of mainstream economists.
• B) usually improve the efficiency of economic activity.
• C) distort the signals that normally guide the allocation of resources.
• D) demonstrate a willingness to sacrifice equity in order to improve efficiency.

---

Definitions:

AMT Purposes

Refers to the specific calculations and adjustments applied to determine the Alternative Minimum Tax owed by an individual or corporation.

Standard Deduction

A fixed dollar amount that reduces the income on which you are taxed, varying by filing status, and used instead of itemizing deductions.

Positive Adjustment

An increase in the amount of reported income or expense, resulting in a higher taxable income.

AMTI

Alternative Minimum Taxable Income, which is calculated to ensure that taxpayers with large amounts of deductions, exemptions, and exclusions still pay a minimum amount of tax.