Which of the Following Characterizes the Negative Income Tax Concept

question 55

Multiple Choice

Which of the following characterizes the negative income tax concept?

• A) It is a flat tax that lower-income households do not pay.
• B) It is a progressive tax structure with enough deductions to provide refunds to some.
• C) It is a regressive tax with low-income earners getting a refund back when taxes are filed.
• D) It is a guaranteed annual income with earned incomes taxed at a flat rate.
• E) It is an income tax that eliminates all the inefficiency that occurs with the current tax system.

---

Definitions:

Market Demand

The overall sum of a particular good or service that consumers in a marketplace are prepared and able to buy across a range of prices.

Market Equilibrium

A situation in a market where the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to a stable price.

Competitive Industry

An industry characterized by a large number of firms competing with each other to provide goods or services to consumers.

Market Demand

The total quantity of a product or service that consumers are willing and able to purchase at various prices during a specified time period.