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Old 08-05-2011, 08:57 PM   #10
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poverty in terms of a lack of income, not of food supply.
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proportional tax (H2)<br />A tax which is fixed as a proportion of a tax base, e.g. income or expenditure generally or on a particular good or service. Although the revenue from the tax grows as the tax base expands, the marginal rate of tax continues to be equal to the average rate of tax. The US PAYROLL TAX is a proportional tax up to the ceiling on the tax.<br /><em>See also:</em> flat rate tax; progressive tax; regressive tax
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axioms of preference (D1)<br />The assumptions necessary for consumer rationality. They are completeness (that a consumer can order all available combinations preferred), transitivity (if A is preferred to B and B to C, then A is preferred to C), selection (the consumer chooses the most preferred state), non-satiation (the consumer prefers more to less of a good) and continuity (there is a boundary in the form of an INDIFFERENCE CURVE separating preferred from non-preferred combinations of goods).
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neutrality of money (E4)<br />A money supply able to affect the price level but not real output and employment. This view of money is challenged by NEOKEYNESIAN economists, who argue that an increase in the money supply, by causing a shift in the LM curve, will bring down interest rates and increase real output.<br /><em>See also:</em> classical dichotomy

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