Which of the Following Is True About Tax Rates and Economic

question 114

Multiple Choice

Which of the following is true about tax rates and economic growth?

• A) Marginal tax rates that take a large share of income will enhance the incentive of individuals to invest and engage in productive activities.
• B) High tax rates will tend to drive investment funds and highly productive citizens to other countries where tax rates are lower.
• C) As marginal tax rates increase, individuals get to keep a larger share of their earnings.
• D) Countries can gain by imposing higher tariffs and other barriers that will restrain international trade.

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Definitions:

Subcontracting

The practice of hiring a third party to perform tasks, provide services, or conduct operations that are normally or could be done in-house.

Predictable Variability

Patterns or changes in demand, supply, or other business factors that can be anticipated based on historical data or known trends.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a specified time period.

Supply And Demand

A fundamental economic concept that describes the relationship between the quantity of a commodity available and the quantity of that commodity people are willing to buy at certain price levels.