Vertical Equity Implies That

question 30

Multiple Choice

Vertical equity implies that
i.tax rates should be equal for all tax payers.
ii.people with higher income should pay more in taxes.
iii.people with higher incomes should pay a lower average tax rate.

• A) i only
• B) ii only
• C) iii only
• D) i and ii
• E) ii and iii

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Definitions:

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate the cost of living.

Basket of Goods

A selection of various items that are used to track inflation and the cost of living over time.

Consumer Price Index

An assessment method that evaluates the overall weighted price of a variety of consumer services and goods, like food, transportation, and healthcare, aimed at measuring the rate of inflation.

Quart of Milk

A unit of liquid measurement commonly used in the United States, equivalent to approximately 0.946 liters of milk.