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If the Income Tax System Were Indexed, a Person Whose

Question 2

Multiple Choice

If the income tax system were indexed, a person whose nominal income went up from $30,000 to $33,000 in a year when the price index rose by 10 percent would pay


A) no increases in nominal income taxes.
B) no increases in real income taxes.
C) lower taxes in both real and nominal terms.
D) higher taxes in both real and nominal terms.

Correct Answer:

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