Question

A regressive tax has a ________ that ________ as income rises. And, it also generally _______ income inequality. Choose the correct combination.

	a.	rate; declines; exacerbates
	b.	rate; increases; exacerbates
	c.	rate; increases; reduces
	d.	cap; increases; reduces

The law of demand states that:

	a.	As the price of a good falls, quantity demanded falls, ceteris paribus
	b.	As the price of a good falls, quantity demanded increases, ceteris paribus
	c.	As the price of a good falls, demand falls, ceteris paribus
	d.	As the price of a good falls, demand increases, ceteris paribus

Answer 1

1.Regressive tax is the opposite of progressive tax

In regressive tax, as the income increases,the rate of tax decreases which completely exacerbate the income inequality because the less a person is earning the more he or she has to pay the tax and vice versa

So the rightt answer is option A

2. According to the law of demand- in Cereris paribus that is,if other things are held constant, the price is inversely related to quantity demanded not demand

So the answer is option B