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.

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Definitions:

Equilibrium

The state in which the concentrations of reactants and products in a reversible chemical reaction are unchanged over time, indicating a balance in the rate of forward and reverse reactions.

Synthetic Route

The planned sequence of chemical reactions used to convert starting materials into desired products in the laboratory or industry.

Reagents

Chemical substances that are employed to bring about a chemical reaction in a provided set of reactants.

Reaction

A process in which substances (reactants) are transformed into different substances (products) through chemical change.