Among countries with per capita GDP in 2006 greater than $24,000, tax rates tend

Question

Among countries with per capita GDP in 2006 greater than $24,000,

tax rates tend to be extremely high

the political structure tends to be relatively democratic

governments tend to be repressive and corrupt

all of the options are correct

2 points

Question 29

Using the cost of a similar market basket of goods across countries to compare an economic variable like gross national income applies the concept of

private equity financing

the Heritage Foundation Index of Economic Freedom

the Gini Index

purchasing power parity

tax rates tend to be extremely high

the political structure tends to be relatively democratic

governments tend to be repressive and corrupt

all of the options are correct

Explanation / Answer

Option B is correct

Whether per capita GDP is high or low, one can expect that tax rates on the riches would be very high in any nation. The possibility of the government being corrupt in a high income or GDP nation is highly unlikely. However with eaducated masses political structure is relatively democratic.

Option D

As the question indicates, we are comparing the same basket of goods across two regions so we need a law of one price or a parity between two market prices.

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