Suppose a Local Government Decides to Increase Taxes on Its

question 17

Multiple Choice

Suppose a local government decides to increase taxes on its residents and use that money to provide meals to each individual in the community.The scheme provides each individual with a small frozen dinner.Compared to a voucher system that allows individuals to purchase meals at a private restaurant,the frozen dinner scheme:

• A)will decrease both quantity and quality of meals consumed.
• B)will not affect the quality or quantity of meals.
• C)will give individuals greater variety and choice of meals.
• D)will increase both quantity and quality of meals consumed.

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Definitions:

Inflation Rate

The rate of growth in the general pricing for goods and services, which inversely affects purchasing capacity.

Stock Market

A public market for buying and selling company stocks and securities, facilitating equity investment and price discovery.

Economic Boom

A period of significant economic growth, high employment, and often inflation within an economy.

Unemployment Rate

The extent of individuals within the labor force who are without work but are actively job hunting.