Figure 8-19

question 295

Multiple Choice

Figure 8-19. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax.

-Refer to Figure 8-19.If the economy is at point A on the curve,then a small increase in the tax rate will

• A) increase the deadweight loss of the tax and increase tax revenue.
• B) increase the deadweight loss of the tax and decrease tax revenue.
• C) decrease the deadweight loss of the tax and increase tax revenue.
• D) decrease the deadweight loss of the tax and decrease tax revenue.

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Definitions:

Bonus Pool

A fund allocated for bonuses, typically based on company performance, and distributed to employees based on predetermined criteria.

Fixed Percentage

A specified, constant proportion or rate that does not change with variation in base quantities, often used in financial contexts like interests or commissions.

Deferred Profit-Sharing Plans

A type of profit-sharing plan where contributions are deferred and placed in a trust for the employee until a set time, often retirement.

Quasi Pension Plans

Programs that mimic traditional pension plans but typically offer more flexibility and are often funded by the employees, sometimes with employer contributions.