Horizontal Equity Means That

question 34

Multiple Choice

Horizontal equity means that

• A)taxpayers with the same amount of income pay the same amount of tax.
• B)taxpayers with larger amounts of income should pay more tax than taxpayer's with lower amounts of income.
• C)all taxpayers should pay the same tax.
• D)none of the above.

Identify the components and calculations involved in determining aggregate expenditure.

Explain the concept of value added by a firm and its significance in GDP calculation.

Differentiate between injections and leakages in the circular flow model and their impacts on GDP.

Interpret the effects of external trade activities and government transactions on GDP.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level, within a specific time frame.

Law of Supply

An economic principle stating that as the price of a good or service increases, the quantity supplied of that good or service also increases, and vice versa, all else being equal.

Law of Demand

A principle that describes the inverse relationship between the price of a good or service and the quantity demanded by consumers.

Demand for Salsa

The quantity of salsa that buyers are willing and able to purchase at various prices, reflecting consumer preferences for this product.