The Following Table Shows Tax Payments Made for Various Incomes

question 30

Multiple Choice

The following table shows tax payments made for various incomes. According to the information in the table below, the tax system is _____ $$\begin{array}{l}\text { Table } 3.1\\\begin{array} { | l | r | r | r | r | } \hline \text { Taxable income } & \$ 1,000 & \$ 2,000 & \$ 4,000 & \$ 8,000 \\\hline \text { Tax payments } & \$ 10 & \$ 30 & \$ 90 & \$ 270 \\\hline\end{array}\end{array}$$

• A) progressive at all levels of income.
• B) progressive for income levels between $1,000 and $2,000, but it becomes regressive above $2,000.
• C) regressive at all levels of income.
• D) regressive for income levels between $1,000 and $2,000, but it becomes progressive above $2,000.
• E) proportional at all levels of income.

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Definitions:

Coefficient of Determination

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.

Correlation

A statistical measure that expresses the extent to which two variables change together, ranging from -1 to 1.

Pearson Correlation

A measure of the linear relationship between two variables, ranging from -1 to 1, where 1 means a perfect positive correlation and -1 means a perfect negative correlation.

Correlation Coefficient

A statistical measure that quantifies the degree of relationship or association between two variables.