Dynamic tax analysis assumes
A) all of the present tax rates will be in place for a minimum of twenty years.
B) changes in the tax rates have no effect on the tax base.
C) changes in the tax rates have no effect on tax revenue.
D) changes in the tax rates will change the tax base.
Answer: D
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The United States
A. has sometimes attained productive efficiency. B. usually attains productive efficiency. C. never attained productive efficiency.
Inflation is an economic problem because it
A) leads inevitably to unemployment. B) makes prices less useful as signals for resource allocation. C) leads to recession. D) results in rapid increases in the money supply.
The primary purpose of economics is to understand how people make
A) money. B) goods and services. C) choices. D) a comfortable living.
You are the mayor of your home town, and one day you arrive at city hall to find angry voters demonstrating against you. They are mad because your office created a garbage-collection monopoly by awarding only one company a permit to collect garbage in
your town. The voters claim that the company is overcharging and providing poor service. They want you to do something that will lower rates and improve service. You call your staff economist, who presents evidence that there are substantial increasing economies of scale to garbage collection. What are your options if you are interested in efficiency?