According to dynamic tax analysis, continually increasing the tax rate will eventually
A. cause an increase in the tax base.
B. cause a decrease in the tax base.
C. result in an initial decrease in the tax base followed ultimately by a rise in the tax base.
D. have no impact on the tax base.
Answer: B
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During the 2009 euro crisis, a number of countries had private banks that had become too "big to save." Explain
What will be an ideal response?
An important factor in the decline of the U.S. textile industry over the past 100 or so years is
a. foreign competitors that can produce quality textile goods at low cost. b. lower prices of goods that are substitutes for clothing. c. a decrease in Americans' demand for clothing, due to increased incomes and the fact that clothing is an inferior good. d. the fact that the minimum wage in the U.S. has failed to keep pace with the cost of living.
Because public goods are
a. excludable, people have an incentive to be free riders. b. excludable, people do not have an incentive to be free riders. c. not excludable, people have an incentive to be free riders. d. not excludable, people do not have an incentive to be free riders.
When the price of a product falls, the income effect induces the consumer to purchase more of it while the substitution effect prompts her to buy less.
a. true b. false