Refer to the information provided in Table 19.4 below to answer the question(s) that follow.Table 19.4Total IncomeTotal Taxes$10,000 $1,000 20,000 2,400 30,000 4,500 40,000 8,000Related to the Economics in Practice on page 393: Refer to Table 19.4. The tax rate structure in this example is
A. progressive.
B. marginal.
C. proportional.
D. regressive.
Answer: A
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When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of
a. Fixed-cost fallacy b. Sunk-cost fallacy c. Hidden-cost fallacy d. None of the above
If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:
A. a decrease of $2,000b. B. an increase of $2,000b. C. a decrease of $1,800b. D. an increase of $180b.
Dara lives in an agricultural society with 2 million acres of farmable land. The population of Dara’s country is growing at a rate of 3 percent. Assuming there is no way to increase the amount of land available, the law of diminishing returns means that ______.
a. output will fall as less land is available per worker b. output will rise, but by ever shrinking amounts c. the country’s output will rise by about 3 percent annually d. innovation will increase output to meet demand
According to the circular flow diagram, in return for land, labor, capital and entrepreneurial ability, households receive _______________________________.
Fill in the blank(s) with the appropriate word(s).