One Consequence of Raising Tax Rates Is That It

question 74

Multiple Choice

One consequence of raising tax rates is that it

• A)provides an added incentive to work
• B)provides less incentive to participate in the underground economy
• C)always increases total tax revenues
• D)leads to less underreporting of income
• E)leads to more underreporting of income

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Definitions:

Sherman Act

A landmark federal statute in the antitrust law of the United States, passed in 1890, that outlaws monopolistic business practices.

U.S. Corporations

Entities that are incorporated under the laws of a particular state in the United States, distinguished by having legal identities separate from their owners.

Trade Barriers

Measures imposed by governments or public authorities to regulate foreign trade and protect domestic industries from foreign competition.

Import Quotas

Limits set by a government on the amount or number of goods that can be imported into a country over a set period of time.