An Example of a Real Flow in the Circular Flow

question 149

Multiple Choice

An example of a real flow in the circular flow diagram is

• A) a household's supply of work effort at its new business.
• B) the government's payment of wages to a soldier.
• C) Nike's payment of wages to workers in China.
• D) your county's collection of property taxes.
• E) a teacher's salary at the local high school.

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Definitions:

Marginal Tax Rate

The rate at which an additional dollar of income is taxed.

Vertical Equity

A principle in taxation that says taxpayers with a higher ability to pay should contribute more in taxes.

Marginal Tax Rate

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

Tax Burden

The total amount of tax paid by an individual, a household, or an organization relative to their income or profits.