Which, If Any, of the Following Taxes Are Proportional (Rather

question 120

Multiple Choice

Which, if any, of the following taxes are proportional (rather than progressive) ?

• A) State general sales tax.
• B) Federal corporate income tax.
• C) Federal estate tax.
• D) Federal gift tax.
• E) All of the above.

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Definitions:

Income Elasticity of Demand

An indicator of the responsiveness of the demand for a product to variations in consumer income.

Cross-Price Elasticity of Demand

A measure of how much the quantity demanded of one good responds to a change in the price of another good.

Quantity Purchased

The total amount of a good or service bought by consumers at a specific price level.

Income Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in consumers' income, holding everything else constant.