Suppose T = .02^$\alpha$.If taxes are regressive which of the following is true? A) $\alpha$ 1 B) 0

Question

Suppose T = .02^$\alpha$.If taxes are regressive which of the following is true? A) $\alpha$ > 1 B) 0 < $\alpha$< 1 C) $\alpha$ = 1 D) $\alpha$ = 0

Quizplus · Accepted Answer

Since taxes are regressive, the more income a person has, the lower percentage of their income they pay in taxes. In this equation, T represents taxes, and each F, S, U, and P represents a certain income class. Since there are more F's (lower income class) than S's, U's or P's (higher income class), the average tax rate will be lower. Therefore, 0 < T < 1, which corresponds to choice B.

Suppose T = α\alphaα If Taxes Are Regressive Which of the Following Is True

Suppose T = $\alpha$ If Taxes Are Regressive Which of the Following Is True