alleryStart learning →A progressive tax means the tax rates do what as a household's income increases?
AStay flat
BReach zero
CIncrease
DDecrease
Answer & Solution
Correct answer: C. Increase
1. The word progressive describes the direction of the rate.
2. The income tax is a progressive tax.
3. That means the tax rates increase as a household's income increases.
4. A regressive tax moves the other way.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 16 'Government Budgets and Fiscal Policy'_
Keep practising Government Budgets and Fiscal Policy
Browse all Government Budgets and Fiscal Policy questions for AP Macroeconomics, or explore more Economics topics.
Related questions
Complete the fiscal rulesMatch each fiscal termStack the budget termsSort the taxes by typePull the rope to the right policyAn economy in recession would call for which kind of fiscal policy under the aggregate demA tax that is proportional at low incomes but regressive above a wage limit describes the:The standardized employment deficit is described as eliminating the impact of: