One Argument for Tax Cuts When the Government Is Running

question 120

Multiple Choice

One argument for tax cuts when the government is running a budget deficit is:

• A) that lower tax revenue will reduce the budget deficit.
• B) that lower marginal tax rates will incentivize employers to hire more workers.
• C) that lower corporate tax rates will incentivize people to work and thus increase the overall tax revenue.
• D) that lower marginal tax rates will incentivize people to work and thus increase the overall tax revenue.
• E) that lower marginal tax rates will decrease aggregate supply.

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Definitions:

Reported Attitude

An attitude expressed or communicated by an individual, which may or may not accurately mirror their actual beliefs or feelings.

Actual Behaviour

The observed actions or reactions of an individual in a given situation, as opposed to intended or theoretical behavior.

Theory of Reasoned Action

A psychological theory that explains an individual's behavior based on their intention to perform the behavior, which is influenced by their attitudes and subjective norms.

Predicting Behaviour

The process of forecasting individuals' future actions based on past and current behavior patterns, often used in psychology and marketing.