When the tax rate increases, the tax revenue
A) always increases.
B) does not change.
C) always decreases.
D) may increase or decrease.
D
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The figure above shows a production possibilities frontier. In the figure, when the economy moves from point E to point D, what is the opportunity cost of a DVD?
A) 0.25 cell phones B) 0.5 cell phones C) 1 cell phone D) 4 cell phones E) zero
The existence of adverse selection results in:
A) reduced market efficiency B) an increase in the likelihood of moral hazard C) increase market transactions D) higher transaction costs
A tax is said to be progressive if
a. the absolute size of the tax (in dollars) increases as income increases b. the wealthy pay a smaller percentage of their income than the poor c. the average tax rate falls as income rises d. the proportion of income paid as taxes increases as income increases e. the proceeds are used to pay for liberal political programs
A shortage of a good means
a. an excess supply of the good b. an excess demand of the good c. quantity demanded is less than the quantity supplied d. the quantity supplied exceeds the quantity demanded e. price is higher than its equilibrium level in the market