A government wishing to maximize its tax revenues should
A. always assess the lowest possible tax rate.
B. always assess the highest possible tax rate.
C. determine the highest possible tax rate and then back it down by exactly 4 percentage points.
D. push tax rates up to the point where revenues peak, but raise the tax rate no farther.
Answer: D
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The two ways in which deficit spending can impose a burden on future generations are
A) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. B) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods. C) by substituting private goods for public goods and thereby benefiting only large businesses. D) by substituting private goods for public goods and thereby shifting resources to foreign residents.
Economists call a game that is played more than once:
A. a repeated game. B. collusion. C. a commitment strategy. D. cooperative price play.
Identify the international organization that makes loans to developing countries
a. The World Bank b. The Federal Reserve c. The World Trade Organization d. The Industrial Development Board e. The Bank of England
If the national output cannot be increased unless the productive capacity or potential GDP increases, the aggregate supply curve is:
a. downward-sloping. b. U-shaped. c. vertical. d. upward-sloping. e. horizontal.