A government proposal to increase marginal tax rates on the wealthiest 1 percent of U.S. residents is supposed to generate an additional $200 billion in tax revenues. It is likely that
A. the actual revenue raised will be less than $200 billion, because some of the people will respond by working less and earning less income that can be taxed.
B. the actual revenue raised will be close to $200 billion, because the wealthy don't respond to work incentives the way poorer workers do.
C. the actual revenue raised will exceed the $200 billion, because the other 98 percent of the population will increase their work effort with a more fair tax system.
D. the actual revenue raised will be more than $200 billion, because the short-run aggregate supply curve is upward sloping.
Answer: A
You might also like to view...
The quantity theory of money asserts that:
a. changes in nominal GDP are inversely related to changes in the velocity of money. b. changes in money supply are positively related to changes in the velocity of money. c. changes in the money supply are unrelated to changes in the price level. d. changes in the output level are unrelated to changes in the price level. e. changes in the money supply are directly related to changes in nominal GDP.
If you currently make $25,000 a year and the CPI rises from 110 today to 150 in five years, then you need to be making $43,333.33 in five years to have kept pace with consumer price inflation
a. True b. False Indicate whether the statement is true or false
The simplest type of oligopoly is
a. monopoly. b. duopoly. c. monopolistic competition. d. oligopolistic competition.
Suppose two demand curves intersect and so have a point in common. At that point, demand shown by the steeper curve will be ________ the flatter curve.
A. as elastic as B. more likely to be unit elastic than C. more elastic than D. less elastic than