As People's Incomes Rise, a Progressive Tax Is Best Described

question 15

Multiple Choice

As people's incomes rise, a progressive tax is best described as taking:

• A)an increasing amount of tax.
• B)the same amount of tax.
• C)the same percent of income as tax
• D)an increasing percent of income as tax.
• E)a decreasing percent of income as tax.

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Definitions:

Budget Line

Represents all the combinations of two goods that a consumer can afford given their prices and the consumer's income.

Indifference Curve

A graphical representation showing combinations of goods or services among which a consumer is indifferent, reflecting their preferences.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, and other income sources.

Indifference Curve

A graphical representation that shows different combinations of two goods or services among which a consumer is indifferent, meaning the consumer has no preference for one combination over another.