Suppose That a Simple Tax System Were to Assess No

question 36

Multiple Choice

Suppose that a simple tax system were to assess no tax up through $10,000, a 10 percent rate for income between $10,000 and $20,000, and a 20 percent rate on every dollar earned above $20,000. If inflation were to run at 10 percent for a year, then indexing would cause the 10 percent bracket to

• A) run from $10,000 to $22,000 if the tax schedule were indexed.
• B) hold fixed from $10,000 to $20,000 despite the indexing because the tax would remain proportional within the 10 percent bracket.
• C) run from $11,000 to $22,000 if the tax schedule were indexed.
• D) be narrowed, but its precise boundary points cannot be determined from the information provided.
• E) none of the above.

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Definitions:

Process of Therapy

The broad sequence of steps or stages through which therapy occurs, from assessment and diagnosis to intervention and evaluation.

Climate

The average weather conditions of a particular area over a long period, including temperature, precipitation, humidity, and wind patterns.

Therapeutic Efficacy

Therapeutic efficacy refers to the ability of a treatment or drug to provide a beneficial effect (medical improvement or cure) on the disease or condition being treated.

Therapeutic Efficacy

The ability of a treatment to produce a beneficial result under ideal conditions.