If the (Average)tax Rate Falls by 20% and as a Result

question 39

Multiple Choice

If the (average) tax rate falls by 20% and as a result the tax base rises by 20%,tax revenues will

• A) rise.
• B) decline.
• C) remain unchanged.
• D) There is not enough information given to answer this question.

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Definitions:

Cost-Effective

Describes a process, method, or system that provides the best possible outcome or value for the money spent.

Potential Consumers

Individuals or groups who are likely to buy a product or service but have not yet made the purchase.

Retail Price

The total cost that a customer pays for a product or service when purchased through a retail channel, including overheads and profit margins.

Structural Risk

A measure of a firm’s difficulty when relationships with vendors do not work as expected.