Which of the Following Statements Is True

question 181

Multiple Choice

Which of the following statements is true?

• A) Tax revenues are maximized when the tax rate is 100%.
• B) Not knowing the economy's position on the Laffer curve means the effects of lowering tax rates are uncertain.
• C) Low marginal tax rates have disincentive effects on work effort.
• D) High marginal tax rates increase incentives to work.

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Definitions:

Virginian

Pertaining to Virginia, a state in the southeastern United States, or its inhabitants.

Patrick Henry

A Founding Father of the United States known for his declaration "Give me liberty, or give me death!" in opposition to British rule.

Common Sense

Practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by (common to) nearly all people.

Thomas Paine

An influential political writer and revolutionary of the 18th century, known for works like "Common Sense" and "The Rights of Man."