Economics Multiple Choice Question – 24 April 2019

The table shows the amount of direct tax paid by individuals at different levels of income in a country in the eurozone.

Which of the following statements about the country’s direct tax system is true?

Select ONE answer:

1. The system is progressive throughout the income range
2. The system is proportional from €10 000 to €20 000 only
3. The system is proportional throughout the income range
4. The system is regressive from between €20 000 and €30 000

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. Tax does indeed rise as income rises but this does not define a progressive system.
2. Correct: The proportion of income taxed remains at ten percent.
3. It is indeed proportional in the 10–20,000 range but not thereafter.
4. Regressive means a lower proportion of tax as income rises. Here it is higher.

 

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