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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