Consider the following statements:
1. Fiscal drag is a result of falling aggregate demand caused by increased taxation.
2. Fiscal drag allows for increased government taxation without actually increasing tax rates.
3. A service tax is an example of the Regressive taxation whereas; the income tax is the Progressive one.
Which of the above statements is/are correct?
1
1 only
2
2 and 3 only
3
1 and 2
4
1, 2 and 3