Topic Questions (EASY): Income and Wealth Inequality

Which of the following statements correctly describes a regressive tax?

It requires low-income earners to pay a higher percentage of their income in taxes than high-income earners.

Marginal tax rates exceed average tax rates.

The cost of collecting the tax is greater than the revenue generated.

The marginal tax rate is greater for high-income earners than for low-income earners.

What is the term for income received by an individual without a corresponding contribution to output?

profit

revenue

salary

transfer payment

Which of the following is an example of a transfer payment?

the marketing expenses of a company

the financial assistance given by a parent to their child while studying

the payment made by a tenant farmer to a landowner as rent

the salary earned by a worker in the government service