What Happens If a Government Increases the Tax Rate

question 82

Multiple Choice

What happens if a government increases the tax rate

• A)As the tax rate increases, tax revenue continually rises and deadweight loss continually falls.
• B)As the tax rate rises, tax revenue rises for a while, but eventually begins to fall; deadweight loss rises but also begins to fall as tax revenue falls.
• C)As the tax rate rises, tax revenue rises for a while, but eventually begins to fall; deadweight loss continually rises.
• D)As the tax rate rises, tax revenue rises for a while, but eventually begins to fall; deadweight loss falls for a while, but begins to rise as tax revenue falls.

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Definitions:

Self-Sacrifice

The act of giving up one's own interests, desires, or well-being for the benefit of others or for a cause.

Individual Survival

The ability of an organism to endure and continue living in its environment through adaptation, resource acquisition, and avoiding risks.

Nonviolence

A philosophy or strategy of conflict resolution that rejects the use of physical violence in order to achieve social or political change.

Moral Reasoning

The process through which individuals make decisions about what is right or wrong, based on ethical principles.