Which of the Following Correctly Describes a Deterministic Economic Model

question 33

Multiple Choice

Which of the following correctly describes a deterministic economic model?

• A)A deterministic model is a model for which the outcome is predicted with certainty.
• B)A deterministic model can only be used to explain short-run economic phenomena.
• C)A deterministic model is used to study economic variables in the presence of asymmetric information.
• D)A deterministic model is used in the study of normative economics.
• E)The outcome of a deterministic model is random and has probabilities attached.

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Definitions:

Neutral Tax

A tax system that is designed to have a neutral impact on the economic choices and behaviors of individuals and businesses, not favoring one decision over another.

Progressive Tax

A tax system where the rate increases as the taxable amount rises, aiming to reduce the tax burden on individuals who have a lower ability to pay.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer’s income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Regressive Tax

A tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners, considered to be inversely proportional to the taxpayer's ability to pay.