Author Question: Wichita is building a convention center and financing it with revenues raised from a city hotel tax. ... (Read 109 times)

jayhills49 · **on:** Jun 29, 2018

Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it.

Someone who is practicing the economic way of thinking would disagree because
A) the hotel tax may lead to a decline in visits to Wichita.
B) they believe that Wichita does not need a new convention center.
C) the hotel tax may reduce commercial property values in the area.
D) there are other projects that could be undertaken with the tax funds.
E) the convention center may not pass a marginal cost-benefit test.

Question 2

When the Fed engages in open market operations, it is buying or selling

A) loans made to banks to meet the legal reserve requirement ratio.
B) gold.
C) U.S. government securities newly issued by the U.S. Treasury.
D) capital equipment.
E) U.S. government securities.