Answer the Question. -Suppose That of the Total Amount Collected in Taxes by in Taxes

question 1

Multiple Choice

Answer the question.
-Suppose that of the total amount collected in taxes by the U.S. government, 25% of it comes from families with incomes greater than $200,000.
If taxes are increased by 5% across the board, which of the following statements will be true?

• A)5% of the additional revenue will come from each income group.
• B)The total amount collected from families with incomes greater than $200,000 will increase by 25%.
• C)A family with an income greater than $200,000 will have to pay 25% more in taxes.
• D)25% of the additional revenue collected by the government will come from families with incomes greater than $200,000.

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Definitions:

Strip Bonds

Bonds that have had their principal and coupon payments separated, creating individual securities from each interest payment and the principal.

Compound-Interest GIC

A Guaranteed Investment Certificate where the interest earned is compounded at regular intervals, allowing the investment to grow at a faster rate compared to simple interest.

Maturity Value

The amount to be paid to the holder of a financial instrument at the end of its term or at maturity.

Dollar Amount

A numerical monetary value specified in units of currency, specifically the United States dollar.