"Bracket Creep" Happens When

question 34

Multiple Choice

"Bracket Creep" happens when

• A)tax liabilities are based on real income and there is a negative inflation rate.
• B)tax liabilities are based on real income and there is a positive inflation rate.
• C)tax liabilities are based on nominal income and there is a negative inflation rate.
• D)tax liabilities are based on nominal income and there is a positive inflation rate.

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Definitions:

Consumption

The use of goods and services by households or individuals, typically measured in economic studies to assess economic activity or well-being.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford with a given budget at prevailing prices.

Income

Money received, especially on a regular basis, from work, property, or investments.

Utility Function

A mathematical representation of a consumer's preference ordering over a set of goods or outcomes.