If government tax policy requires Jane to pay $28,000 in taxes on annual income
ID: 1202371 • Letter: I
Question
If government tax policy requires Jane to pay $28,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is:
regressive.
progressive.
proportional.
optional.
When increasing oil prices cause aggregate supply to shift to the left, then:
unemployment and inflation decrease.
unemployment decreases and inflation increases.
unemployment and inflation increase.
unemployment increases and inflation decreases.
regressive.
progressive.
proportional.
optional.
Explanation / Answer
1. Progressive tax as tax increases with the increase in the income of the consumer.
2. Unemployment and inflation increase. As leftward shift of AS increases the price level and decreases the output of the economy. When output decreases then demand of labor decreases and as a result unemployment increases.
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