If the government wishes to maximize its tax revenue, it should
A) recognize that too high of a tax rate can decrease the tax base.
B) engage in static tax analysis.
C) recognize that an increase in the tax rate will lead to an increase in tax revenues.
D) use only flat taxes.
A
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The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a substitute product
Indicate whether the statement is true or false
. We saw in Chapter 18 that many central banks have turned to a policy framework of inflation targeting. Discuss if this would be effective in a country experiencing deflation.
What will be an ideal response?
If the price of a product is $12, its average total cost is $2 and its average variable cost is $15 at the profit-maximizing output level, in the short run the firm:
A. should expand output until MR = MC. B. cannot cover total fixed costs. C. experiences a loss. D. must always shut down.
Velocity is the rate at which money changes hands.
Answer the following statement true (T) or false (F)