The Concept of Elasticity with Respect to Taxation Holds That

question 13

True/False

The concept of elasticity with respect to taxation holds that tax yields should be automatically responsive to changes in economic conditions. For example, as per capita income grows, revenues should also increase without increases in the tax rate.

---

Definitions:

Consumption Function

A formula that expresses the relationship between total consumption and gross national income.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, used to quantify the amount of variation or dispersion of a set of values.

Aggregate Income

The total income earned by all factors of production in an economy, including wages, rents, interest, and profits.

Aggregate Consumption

The total amount of goods and services consumed in an economy, often used to analyze economic health and growth.