According to supply-side economists, lower marginal tax rates will not necessarily lead to lower tax revenues because
A) the crowding out effect does not apply to taxes.
B) lower tax rates have no effect on the opportunity cost of labor.
C) the aggregate supply curve will shift inward to the left if the tax rates are lowered.
D) the lower marginal tax rates will be applied to a growing tax base due to economic growth.
D
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According to the theory of the invisible hand, if buyers and sellers are free to pursue their own self-interest, the result often will be:
A. an equitable allocation of resources. B. an incomplete allocation of resources. C. an efficient allocation of resources. D. the exploitation of productive resources.
If Henry, a perfectly competitive lime grower in Southern California, can sell his limes at a price greater than his average total cost, Henry will
A) incur an economic loss. B) incur an accounting loss. C) have an incentive to shut down. D) make an economic profit. E) make zero economic profit.
If a price floor is not binding, then a. there will be a surplus in the market
b. there will be a shortage in the market. c. there will be no effect on the market price or quantity sold. d. the market will be less efficient than it would be without the price floor.
The Federal Open Market Committee:
A. is responsible for monitoring how goods and services are being sold on the open market. B. is responsible for regulatory oversight and implementation of monetary policy of regional banks. C. is the most important policy-making body of the Federal Reserve. D. includes all regional bank presidents and the Board of Governors.