Suppose that a simple tax system were to assess no tax up through $10,000, a 10 percent rate for income between $10,000 and $20,000, and a 20 percent rate on every dollar earned above $20,000. If inflation were to run at 10 percent for a year, then indexing would cause the 10 percent bracket to
A) run from $10,000 to $22,000 if the tax schedule were indexed.
B) hold fixed from $10,000 to $20,000 despite the indexing because the tax would remain proportional within the 10 percent bracket.
C) run from $11,000 to $22,000 if the tax schedule were indexed.
D) be narrowed, but its precise boundary points cannot be determined from the information provided.
E) none of the above.
Correct Answer:
Verified
Q26: Which of the following word equations accurately
Q27: It is not completely accurate to assume
Q28: Which of the following are transfer programs
Q29: One variant of rational expectations theory that
Q30: As a percentage of GDP, the total
Q32: Government in any economy can influence aggregate
Q33: Suppose inflation were proceeding at a rate
Q34: The structural deficit
A) is the same thing
Q35: One interpretation of the correlation between changes
Q36: Over short-run periods during the past three
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents