The Difference Between a Fixed Tax and a Variable Tax

question 193

Multiple Choice

The difference between a fixed tax and a variable tax is that

• A)fixed taxes can never be changed, but variable taxes can be changed.
• B)a change in fixed taxes has no effect on aggregate demand, but a change in variable taxes has an impact.
• C)a variable tax changes when GDP changes, but a fixed tax does not change with GDP.
• D)a variable tax can be changed easily, whereas changing fixed taxes requires a constitutional amendment.

---

Definitions:

Atoms

The smallest units of matter that form chemical elements, consisting of a nucleus surrounded by electrons.

Potassium

A chemical element with the symbol K, atomic number 19, and one of the alkali metals, essential for living organisms.

Electrons

Subatomic particles with a negative electric charge, found in electron shells around an atom's nucleus.

Neutral Atoms

Atoms with an equal number of protons and electrons, resulting in no overall electric charge.