Answer:
Variable tax is the tax rate which depends on the level of income.
It is measured as a percentage of income.
Fixed tax is independent of income.
The main difference between variable taxes and fixed taxes is that unlike fixed variable taxes do not vary with GDP
Graph:
Explanation:
from the graph,
it can be seen that the income decrease is greater when a fix tax is imposed than an income decrease with variable tax imposed.
Statement:
The change in equilibrium output is greater when the government implements the fixed tax hike:
TRUE
6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed...
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