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output (income) per year will have to be produced in the world

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How much more output (income) per year will have to be produced in the world
(a) Just to provide the 2.7 billion "severely" poor population with $1 more output per day? $ _______
(b) To raise the incomes of the world's "severely poor" population (income less than $2 per day)
to the official threshold of U.S. poverty (roughly $5,000 per year per person)? $ ________

(a) Assuming a 10 percent sales tax is levied on all consumption, complete the following table:

Sales Percent of
Income Consumption Tax Income Paid in Taxes
$10,000 $12,000 ______ __________
20,000 18,000 ______ __________
40,000 32,000 _______ __________
80,000 60,000 ________ __________
(b) Is the sales tax progressive or regressive?

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Solution Summary

This solution evaluates the sales tax as progressive or regressive.

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How much more output (income) per year will have to be produced in the world

(a) Just to provide the 2.7 billion "severely" poor population with $1 more output per day?

$2.7 billion. It will be $1 per person for 2.7 billion people.

(b) To raise the incomes of the world's "severely poor" population (income less than $2 per day)
to the official threshold of U.S. poverty (roughly $5,000 per year per person)?

$13.5 trillion. ...

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