Answer the next question on the basis of the following five schedules, all of which represent income tax schedules for an economy. All figures are in billions of dollars.IIIIIIIVVTaxBase (Income)TaxBase (Income)TaxBase (Income)TaxBase (Income)TaxBase (Income)$30$100$10$100$5$100$30$100$10$10050200202001520060200302006030030300303009030060300704004040050400120400100400Which of the above schedules represent(s) a progressive tax?
A. III and V
B. III only
C. II and III
D. V only
Answer: A
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Which of the following is not a characteristic of a monopolistically competitive market structure?
A) All sellers sell products that are differentiated. B) There is a large number of independently acting small sellers. C) Each firm must react to actions of other firms. D) There are low barriers to entry of new firms.
According to rational expectations theory,
A) increasing the money supply to reduce unemployment will always be successful. B) decreasing the money supply to reduce unemployment will usually be successful. C) increasing the money supply to reduce unemployment will not be successful because of an offsetting decrease in prices. D) increasing the money supply to reduce unemployment will not be successful because of an offsetting increase in prices.
According to the law of demand, if:
a. product price increases, quantity demanded will decrease. b. consumer income increases, quantity demanded will increase. c. product price increases, quantity demanded will increase. d. consumer income increases, quantity demanded will decrease. e. supply increases, demand will increase.
The idea that policy actions have no real effects in the short run if they are anticipated and no real effects in the long run is called the
A. adaptive proposition. B. money illusion proposition. C. Keynesian proposition. D. policy irrelevance proposition.