A Tax Is Structured So That the Tax as a Percentage

question 125

Multiple Choice

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n) :

• A) flat tax.
• B) regressive tax.
• C) progressive tax.
• D) excise tax.

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Definitions:

Government

The organization, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it.

External Benefit

A benefit that affects parties not directly involved in a transaction, leading to positive side effects or externalities.

Harmful Chemicals

Substances that are toxic or dangerous to health and the environment.

Equilibrium Quantity

The quantity of goods or services supplied equals the quantity demanded at the market price, achieving market balance.