-Refer to the Above Data

question 105

Multiple Choice

-Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is imposed in this economy,the tax system:

• A) is regressive.
• B) is proportional.
• C) is progressive.
• D) may be either proportional or progressive.

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Definitions:

Trade Problem

Issues or challenges that arise in the process of exchange of goods, services, or both between countries.

High Protective Tariffs

Elevated taxes imposed on imported goods to protect domestic industries from foreign competition.

Frederic Bastiat

A French economist and writer known for his theories on free markets and the unseen economic consequences of government intervention.

Free Trade

An economic policy that allows imports and exports between countries with minimal or no tariffs, quotas, subsidies, or prohibitions to encourage international trade.