The Tax Elasticity for the Federal Government of the United

question 32

Multiple Choice

The tax elasticity for the federal government of the United States over the past 20 years was roughly equal to

• A) 1.8; that is, a 1 percent increase in GDP generated a 1.8 percent increase in tax revenue.
• B) -1.8; that is, a 1 percent reduction in GDP causes tax revenues to climb by 1.8 percent.
• C) 1.8; that is, a 1.8 percent increase in GDP could be expected to generate a 1 percent decrease in tax revenue.
• D) .55; that is, a 0.55 percent increase in tax revenue could be expected if GDP increased by 1 percent.
• E) none of the above.

---

Definitions:

School Achievement

The level of academic performance and success achieved by an individual within an educational environment.

Family Income

The total amount of money earned by members of a family, contributing to their household.

Gay Parents

Refers to homosexual individuals or couples who are raising children in a family setting.

Lesbian Parents

Female same-sex couples who are raising children together.