Classical economic theory predicted that in the long run the economy would experience:
a. below full unemployment.
b. rising rate of inflation.
c. full employment.
d. idle factors of production.
Question 2
A tax whose impact varies inversely with the income of the person taxed, and poor people have a higher percentage of their income taxed than rich people, is known as a:
a. regressive tax.
b. progressive tax.
c. proportional tax.
d. flat tax.
e. tax holiday.
