Author Question: Because the income tax structure is progressive, the amount of taxes paid is a _____. a. constant ... (Read 57 times)

dollx · **on:** Jun 30, 2018

Because the income tax structure is progressive, the amount of taxes paid is a _____.
a. constant fraction of income throughout the business cycle
b. larger fraction of income in expansions than in contractions
c. smaller fraction of income in expansions than in contractions
d. decreasing function of income in both expansions and contractions
e. constant amount at all levels of output and income

Question 2

Marianne and Laura are both homemakers with children. When Laura starts to work as an unpaid volunteer at a hospital, she hires Marianne to care for her young child. In this context, the gross domestic product (GDP) will _____.
a. increase
b. decrease
c. remain unaffected
d. increase if Marianne cares for the child better than Laura
e. increase if Laura treats patients with more sincerity than the other volunteers