If an Increase in Marginal Tax Rates Leads to an Increase

question 4

Multiple Choice

If an increase in marginal tax rates leads to an increase in tax revenues,then

• A)the Laffer curve model of tax revenue is refuted.
• B)supply-side economics is refuted.
• C)the economy could be below the tax revenue maximizing tax rate.
• D)we could be on the upward sloping portion of the Laffer curve.

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Definitions:

Fahrenheit

A temperature measurement system where water's freezing point is at 32 degrees and its boiling point is at 212 degrees, given standard atmospheric conditions.

Celsius

A scale and unit of measurement for temperature where 0 degrees is the freezing point and 100 degrees is the boiling point of water under standard atmospheric conditions.

Body Temperature

The measure of the body's ability to generate and get rid of heat, essential for the proper function of enzymes and bodily processes.

Boiling

The rapid vaporization of a liquid when it is heated to its boiling point, the temperature at which it changes phase from liquid to gas.