If We Want to Gauge How Much the Income Tax

question 154

Multiple Choice

If we want to gauge how much the income tax system distorts incentives, we should use the

• A)average tax rate.
• B)ability-to-pay principle.
• C)total tax revenue collected.
• D)marginal tax rate.

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Definitions:

Market Basket

A collection of goods and services used as a constant representative sample for measuring inflation or the cost of living.

Commodity Price Index

An index that measures the overall direction of commodity prices over time, typically involving agricultural products, metals, and energy goods.

The Economist

A weekly magazine focusing on global news, politics, economics, business, and finance.

Commodity Prices

The prices of basic goods that are typically used as inputs in the production of other goods and services, such as metals, agricultural products, and energy sources.