o 6/30/2016 1 1:55 PM 93.6/1006/25/2016 03:38 PM PrintCalculator 9 Gradebook AQu

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o 6/30/2016 1 1:55 PM 93.6/1006/25/2016 03:38 PM PrintCalculator 9 Gradebook AQuestion 17 of 223 Map Sapling Learning The graph below depicts the curmulative distribution of income of a hypothetical economy (refer to the Hint). The income tax system requires households that earn from SO to $60.000 to pay 25% in taxes, $60,001 to $200,000 pays 35%, over $200.000 pays 45 Assume these lines do not move. 5% in taxes. These brackets are referenced by the black lines in the graph. Suppose that the economy experiences a 25% inflation rate that is completely transmitted to wages, salaries and any other type of earnings. Modify the points on the diagram below to depict the new situation after inflation occurred. Preserve the order of the graph "kinks (A, B, C. D) when you do your placements. Then answer the multiple choice question. Yo up Yo 100 What happens to the percentage of households ushds 35% 901 25%135% paying the highest income tax rate? O O O O O doubles. remains the same. is cut in half increases 50% reduces 50%. increases 25%. 70 You in y ans at 4o O el O We 40 80 120 160 200 240 280 320 360 400 Tec Income (thousands of dollars) O Previous Give Up & View Souton check Answer 0 Next Exit Hint abovtws careers partners privacy policy terms of use comact us help

Explanation / Answer

when the income levels increased to the people, defnitely the payment of tax will be increase but the proportionate of the same percent. so, by following elimination process i can say that the tax rate will be increase by 50%.

option D is correct

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