Suppose Jill has earned more income this year as compared to what ...

[EY67]

Suppose Jill has earned more income this year as compared to what she did last year. Her income tax has also increased. Does it necessarily mean that the income tax system is progressive? Explain.
 
  What will be an ideal response?

Question 2

Suppose you observe that the price of a good increases and that the quantity of this good sold also increases. If only the demand curve or the supply curve shifts this suggests that
 
  A) supply increased over time while demand remained the same.
  B) supply decreased over time while demand remained the same.
  C) demand increased over time while supply remained the same.
  D) demand decreased over time while supply remained the same.

[Viet Thy]

Answer to Question 1

No, the amount of income tax can increase as income increases in any of the three tax systems (regressive, progressive, and proportional). However, in a progressive tax system, the tax rate (not the tax amount) increases as income increases.

Answer to Question 2

C