Which of the Following Would Indicate That Income Tax Is

question 166

Multiple Choice

Which of the following would indicate that income tax is progressive?

• A) High-income earners pay $3,000 in taxes; low-income earners pay $1,000.
• B) Low-income earners pay $3,000 in taxes; high-income earners pay $1,000.
• C) Both high-income and low-income earners pay $1,000 each in taxes.
• D) High-income earners pay 20 percent of their income in taxes; low-income earners pay 10 percent.
• E) Both high-income and low-income earners pay 10 percent of their income in taxes.

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Definitions:

Maximizing Profits

The process of increasing the difference between the revenue generated and the costs incurred by a business.

Economic Conditions

The state of the economy at a given time, influenced by factors like inflation rates, unemployment levels, GDP growth, and market demand.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Gross Domestic Product

A measure of the economic output of a country, calculated as the total value of all goods and services produced over a specific time period.