Which of the following is correct?
A. Both the federal tax system and the state and local tax systems are regressive.
B. The federal tax system is progressive, while the state and local tax systems are regressive.
C. The federal tax system is regressive, while the state and local tax systems are progressive.
D. Both the federal tax system and the state and local tax systems are progressive.
Answer: B
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In the Classical model, an increase in aggregate demand leads to __________ real GDP and __________ price level
A) an unchanged; an unchanged B) a rising; an unchanged C) a rising; a rising D) an unchanged; a rising
According to the economics of exhaustible resources, if the interest rate increases,
A) an exhaustible resource will be used up sooner. B) an exhaustible resource will be used up over a longer period of time. C) the period of time until an exhaustible resource is used up will not change. D) none of the above
One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals b. Adverse selection has to do with unobservable actions of individuals c. Adverse selection is when individuals change their behaviors because of a contract d. Adverse selection is when you choose the wrong answer on a test
An auto rental company lowers the price of its rentals to increase its market share. The price cut increases quantity demanded, but total revenue decreases. This result suggests that over this price range, the demand for the auto rentals is:
A. unit elastic. B. inelastic. C. elastic. D. perfectly elastic.