Tax Cuts and Deregulation May Cause Output in an Economy

question 51

Multiple Choice

Tax cuts and deregulation may cause output in an economy to increase by each of the following, except:

• A)increasing the value of output by reducing deadweight tax burdens
• B)luring the underground economy to the surface
• C)increasing incentives to produce
• D)reducing competition

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Definitions:

Federal Government Spending

Expenditures by the federal government on goods, services, and public projects, part of the country's fiscal policy.

Average Tax Rate

The proportion of the total taxable income paid in taxes, calculated by dividing the total tax amount by the total income.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government.

Federal Income Tax

The tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.