Which statement correctly describes a progressive tax system?
Correct answer: C. The tax rate rises as income rises
- A. The tax rate falls as income rises
- B. The tax rate stays fixed for every taxpayer
- C. The tax rate rises as income rises
- D. The tax is charged only on imported goods
Explanation
In a progressive tax system, higher income groups pay a larger proportion of their income in tax. A fixed rate is proportional taxation, while a tax on imports is a customs duty rather than a definition of progressivity.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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