To make a tax system more progressive, policy makers could
A. Raise marginal tax rates for higher incomes.
B. Narrow the tax base.
C. Raise sales taxes on commonly purchased items.
D. Allow all interest expenses to be deductible, not just interest on mortgages.
Answer: A
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All of the following are shortcomings of GDP as a measure to human well-being except it:
a. Excludes black market and underground transactions. b. Excludes quality improvements that do not increase price or quantity sold. c. Excludes the value of leisure time. d. Counts harmful and dangerous output the same as useful output. e. Excludes international transactions.
Firms that operate in perfectly competitive markets try to
a. maximize revenues. b. maximize profits. c. equate marginal revenue with average total cost. d. All of the above are correct.
Which statement is true?
A. There was a great deal of stagflation in the 1970s. B. We had the worst recession since World War II in the late 2000s. C. We have had twelve recessions since January, 1945. D. All of the choices are true.
If an increase in income leads to a decrease in the demand for salami, then salami is
A) an inferior good. B) a neutral good. C) a necessity. D) a normal good.