Which of the Main Economic Schools of Thought Would Believe

question 93

Multiple Choice

Which of the main economic schools of thought would believe that the government should undertake a tax policy stressing work and investment incentives?

• A)Rational expectations
• B)Classical
• C)Supply-side
• D)Keynesian
• E)Monetarist

---

Definitions:

Progressive

Describes a taxation system where the tax rate increases as the taxable amount increases, aiming to distribute the tax burden more equitably.

Regressive

A term often used to describe taxes where the tax rate decreases as the taxable amount increases.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the tax rate applied to each additional dollar of income.

Average Tax Rate

The fraction of total income that is paid as taxes, calculated by dividing the total tax amount by the total income.