Which Statement Is the Best Definition of a Progressive Tax

question 45

Multiple Choice

Which statement is the best definition of a progressive tax system over a business cycle?  

• A) A constant fraction of income is taxed throughout the business cycle, i.e., as the economy experiences considerable fluctuation. 
• B) A larger fraction of income is taxed in expansions than in contractions. 
• C) A smaller fraction of income is taxed in expansions than in contractions. 
• D) There is a decreasing amount of income in both expansions and contractions.

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Definitions:

Louisiana Purchase

The acquisition of the territory of Louisiana by the United States from France in 1803, significantly expanding the size of the nation.

Mechanical Reaper

A machine invented in the 19th century that significantly increased the efficiency of harvesting crops.

Capital

Resources made and used by people to produce and distribute goods and services, including tools, machinery, and buildings.

Bulldozer

A heavy piece of equipment used in construction to move or remove large amounts of earth or debris, featuring a large flat blade.