A Change in the Misery Index

question 21

Multiple Choice

A change in the misery index

• A)may indicate a change in the chances of an incumbent to get re-elected
• B)may arise from a change in the inflation rate even if unemployment remains constant
• C)is likely to occur if the economy experiences a positive supply shock
• D)all of the above
• E)none of the above

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Definitions:

Average Tax Rate

The ratio of the total taxes paid to the total taxable income, showing the portion of income that goes to taxes.

Income

Financial gains, usually received at consistent intervals, from employment or investing.

Benefits Principle

A taxation theory suggesting that people should be taxed based on the benefits they receive from government services.

Progressive Tax

A tax system in which the tax rate increases as the taxable base amount increases, resulting in higher income individuals paying a larger percentage of their income in taxes compared to lower-income individuals.