Suppose That 1983 Is the Base Year for the Consumer

question 138

Multiple Choice

Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 260.What does this "260" mean?

• A) What cost $100 in 1983 on average cost 2.60 times as much in 2019.
• B) What cost $100 in 1983 on average cost $260 more in 2019.
• C) What cost $100 in 1983 on average cost 0.26 times as much in 2019.
• D) What cost $100 in 1983 on average cost $26 more in 2019.

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Definitions:

Tax Tables

A set of charts provided by the IRS that help taxpayers determine the amount of federal income tax they owe based on their income level and filing status.

Tax Rate Schedules

Detailed charts provided by the IRS that determine the amount of tax an individual or entity owes based on their income level.

Progressive Tax Structure

A taxation system where tax rates increase as the taxable amount increases, resulting in higher income earners paying a larger percentage of their income in taxes.

Marginal Tax Rates

The rate at which an additional dollar of income would be taxed, which varies based on income levels and is a fundamental component of progressive tax systems.