Which Statement Is TRUE

question 277

Multiple Choice

Which statement 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.

---

Definitions:

Poor Planning

Inadequate preparation or foresight, often leading to failures or suboptimal outcomes in projects or activities.

Unmotivated Owners

Refers to individuals who possess ownership in a business but lack interest, enthusiasm, or the drive to actively engage, lead, or improve the venture.

Government Loans

Financial sums lent to individuals or entities by government bodies, often with lower interest rates and longer repayment terms than private loans.

Government Purchasing Programs

Initiatives or schemes implemented by the government to buy or procure goods and services, often to support domestic producers or fulfill public service mandates.