Assume that you pay $10,000 of tax on a taxable income of $50,000. If your taxable income were $150,000, your tax payment would be $25,000. This tax structure is:
A. proportional.
B. regressive.
C. progressive.
D. discriminatory.
Answer: B
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In the determination of economic growth, political freedom
A) is equally as important as economic freedom. B) contributes little to job growth. C) appears to be less important than economic freedom. D) is more important than economic freedom.
If the economy is slipping into a recession, which of the following would be an appropriate fiscal policy?
A) a decrease in oil prices B) a decrease in government purchases C) a decrease in taxes D) an increase in the money supply and a decrease in interest rates
A phenomenon closely related to market overreaction is
A) the random walk. B) the small-firm effect. C) the January effect. D) excessive volatility.
Unit root tests
A) use the standard normal distribution since they are based on the t-statistic. B) cannot use the standard normal distribution for statistical inference. As a result the ADF statistic has its own special table of critical values. C) can use the standard normal distribution only when testing that the level variable is stationary, but not the difference variable. D) can use the standard normal distribution but only if HAC standard errors were computed.