ACCA BT Chapter 18 – Macroeconomics – Questions
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Question 3, asked ChatGPT the question, it gives me proportional tax. which is initially my answer. Can u explain why the answer is regressive tax.
why is tax charged on domestic heating considered regressive? Dont high income individual use heating too, making it a proportional tax?
there is an inverse relationship between income and regressive tax, the greater your salary the less RTAX you pay, vice versa. its similar to total fixed cost and level of output produced.
Yes. It is charged as a % of value not of units
Yes. it is a % of the value not the units.
what is volorem tax?
An “ad valorem tax” is charged as a fixed percentage of the price of goods. A good example is value added tax.
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An ad valorem tax is related to value and ‘false’ is marked as the correct response.
On q6 why is false incorrect?
It is charged as a fixed percentage
It is charged as a % of value not as an amount per unit.