Figure 8-19

question 213

Multiple Choice

Figure 8-19. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax.

-Refer to Figure 8-19.If the economy is at point B on the curve,then a small decrease in the tax rate will

• A) increase the deadweight loss of the tax and increase tax revenue.
• B) increase the deadweight loss of the tax and decrease tax revenue.
• C) decrease the deadweight loss of the tax and increase tax revenue.
• D) decrease the deadweight loss of the tax and decrease tax revenue.

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Definitions:

Nonexempt

Refers to employees who are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA).

Clerk

An administrative or office worker responsible for managing files, keeping records, and performing general clerical duties.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, typically used as an indicator of inflation.

Real Wages

The purchasing power of an individual's wages, taking into account inflation and cost of living.