Refer to the diagram, in which C 3 is the before-tax consumption schedule.The after-tax consumption schedule represented by C 2 reflects:
A. a lower MPC than is embodied in C 3 .
B. a regressive tax system.
C. a proportional tax system.
D. a progressive tax system.
B. a regressive tax system.
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In a command economy, the three economic questions are answered by which of the following?
a. The production and consumption choices made by sellers and buyers in decentralized markets. b. A cartel of major transnational corporations, government agencies, and consumer advocates. c. A trilateral commission of major corporations, elected officials, and economists d. A central authority such as a peoples' committee or a dictator.
If inflation is correctly anticipated, in a transaction between borrowers and lenders, inflation
a. will not reduce purchasing power of the money paid back b. will redistribute purchasing power from borrowers to lenders c. will not redistribute purchasing power d. will redistribute purchasing power from to lenders to borrowers e. cannot be taken into consideration when a loan is negotiated