A country is using a proportional tax when
a. its marginal tax rate equals its average tax rate.
b. its marginal tax rate is less than its average tax rate.
c. its marginal tax rate is greater than its average tax rate.
d. it uses a lump-sum tax.
a
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A change in consumers' incomes causes a change in:
A. the demand for normal goods but not the demand for inferior goods. B. supply. C. demand. D. the cross-price elasticity of demand.
The reserve demand schedule is drawn on a graph that has the quantity of reserves on the horizontal axis and
A. the price level is on the vertical axis. B. the federal funds rate is on the vertical axis. C. the price of bonds is on the vertical axis. D. income is on the vertical axis.
When inflation causes relative-price variability,
a. consumer decisions are distorted and the ability of markets to efficiently allocate factors of production is impaired. b. consumer decisions are distorted, but markets are still able to efficiently allocate factors of production. c. consumer decisions are not distorted, but the ability of markets to efficiently allocate factors of production is impaired. d. consumer decisions are not distorted and markets are still able to efficiently allocate factors of production.
Assume the demand schedule for product C is downsloping. If the price of C falls from $2.00 to $1.75:
A. the demand for C will decrease. B. a larger quantity of C will be demanded. C. the demand for C will increase. D. a smaller quantity of C will be demanded.