In Each of the Following Cases Indicate Whether the Change

question 33

Essay

In each of the following cases indicate whether the change in profits due to the spread effect was (i)greater than (ii)less than,or (iii)equal to the change in profitability due to the repricing GAP. In some cases you may not be able to tell; indicate which ones.

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Definitions:

Progressive Taxes

A tax system in which the tax rate increases as the taxable amount increases, placing a higher tax burden on individuals with higher incomes.

Proportional Taxes

A tax system where the tax rate remains constant regardless of the amount on which the tax is imposed, resulting in taxes being proportionate to the income.

Direct Taxes

Taxes paid directly to the government by the individual or organization on whom it is levied, such as income tax or property tax.

Direct Tax

A form of taxation where the burden directly falls on the income or wealth of the individual or entity being taxed, such as income tax or property tax.