Economics 0455 · IGCSE · Fiscal policy

Fiscal policy — practice question

A government brings in a fresh tax. It increases the price of each $\$10$ good by $\$1$ and the price of each $\$20$ good by $\$2$. What conclusion can be drawn about the character of this tax?

  • Ait is a direct tax: no; it is a specific tax: no; it is a progressive tax: no
  • Bit is a direct tax: no; it is a specific tax: no; it is a progressive tax: yes
  • Cit is a direct tax: yes; it is a specific tax: yes; it is a progressive tax: no
  • Dit is a direct tax: yes; it is a specific tax: yes; it is a progressive tax: yes

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