Home / Aptitude Tests / Economics / The curve labelled W...

The curve labelled W shows the

...

Use the graph above to answer the question

The curve labelled W shows the

The curve labelled W shows the

A.

Regressive tax

B.

Proportional tax

C.

Specific tax

D.

Progressive tax

Correct answer is D

A progressive tax is a tax system in which the tax rate increases as the amount of taxable income increases. This means that people with higher incomes pay a higher percentage of their income in taxes than people with lower incomes.

 

The curve labeled W shows that the tax rate increases as the amount of taxable income increases. This is the defining characteristic of a progressive tax system.