In a progressive tax system
A) the marginal tax rate and the average tax rate are the same for every income level and the same as income increases.
B) the marginal tax rate increase as income increases but the average tax rate does not change as income increases.
C) the marginal tax rate and the average tax rate increase as income levels increase and the marginal tax rate exceeds the average tax rate.
D) the marginal tax rate and the average tax rate decrease as income levels increase and the marginal tax rate is less than the average tax rate.
C
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Using the same mpc and multiplier as before (we had chosen the example where mpc = 0.8, resulting in mult = 5)
What will be an ideal response?
As the economy nears the end of a recession, which of the following do we typically see?
A) increased spending on capital goods by firms B) further decreases in consumer spending C) increasing interest rates D) all of the above