A Tax in Which the Tax Rate Increases with Increases

question 22

Multiple Choice

A tax in which the tax rate increases with increases in income is a(n)

• A)progressive tax.
• B)regressive tax.
• C)proportional tax.
• D)example of relative deprivation.
• E)earned-income tax credit.

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Definitions:

Open Market Operations

Central bank activities involving the buying or selling of government securities to control the money supply and interest rates.

Discount Rate

The interest rate set by central banks that is charged to commercial banks for loans, influencing monetary policy and the money supply.

Severe Recession

An unusually deep and prolonged downturn in economic activity that exceeds the standard definition of a recession, often marked by significant declines in GDP and employment.

Interest Rates

The cost of borrowing money or the return on invested savings, typically expressed as a percentage of the principal amount per year.