During recent elections,consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is severely regressive.What is the economic interpretation of their statement?

A) The poor get ill more often than do the rich.
B) The poor pay higher prices for medicine and drugs than do the rich.
C) The poor pay a higher percentage of their income in taxes on medicine and drugs than do the rich.
D) All consumers pay too much money for medicine and drugs.
E) The sales tax discourages the poor from seeking medical treatment.

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Veronica Rodriguez · Accepted Answer

Final Answer : C, Explanation :  The statement about the sales tax being severely regressive suggests that it disproportionately affects low-income individuals. This would be the case if the poor pay a higher percentage of their income in taxes on medicine and drugs than do the rich, as suggested by choice C. Choices A and B may also be true, but they do not directly relate to a regressive tax. Choice D is not supported by the given information, and choice E is a possible outcome but not the economic interpretation of the statement.

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