A Tax System Based on the Ability-To-Pay Principle Claims That

question 2

Multiple Choice

A tax system based on the ability-to-pay principle claims that all citizens should

• A)pay taxes based on the benefits they receive from government services.
• B)pay the same amount in taxes.
• C)pay taxes based on consumption rather than income.
• D)make an equal sacrifice.

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Definitions:

Microeconomic Statement

An assertion or observation that pertains to the individual units of the economy, such as households or businesses, rather than the economy as a whole.

Real Domestic Output

The total value of all goods and services produced within a country's borders adjusted for inflation.

Labor Force

The total number of people available to work, including both the employed and the unemployed who are seeking employment.

General Price Level

An overall measure of the cost of goods and services in an economy at a specific time.