The marginal rate of tax paid is
The total tax paid/ total income
Total income/ total tax paid
Change in the tax paid/ change in income
Change in income/ change in tax paid
In a regressive tax system
The amount of tax paid increases with income
The average rate of tax decreases with more income
The average rate of tax falls as income increases
The average rate of tax is constant as income increases
Open market operations occur when the government
Reduces spending
Buys and sells bonds and securities
Increases taxation
Increases the exchange rate
A fall in interest rates is likely to
Increase aggregate demand
Increase savings
Decrease consumption
Decrease exports
If there is cyclical unemployment in the economy the government might
Increase interest rates
Encourage savings
cut taxes
Reduce government spending
The precautionary demand for money is
An idle balance
An active balance
Directly related to interest rates
Inversely related to income
If the economy grows the governments budget position should automatically
Worsen
Improve
Stay the same
Decrease with inflation
