If Tax Rates Are Cut,one Might Expect to Observe an Increase

question 5

Multiple Choice

If tax rates are cut,one might expect to observe an increase in the budget deficit.Supply-siders question this observation,arguing that

• A)this is a price that must be paid for a more equitable tax system.
• B)when taxes are cut,expenditures must also be cut.
• C)a decrease in the tax rate may actually generate an increase in tax revenues.
• D)tax wedges will make up the difference.
• E)taxes should not be cut;transfer payments should be increased.

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Definitions:

Odors

Smells, especially those that are distinctive or unpleasant.

Bowel Function

The natural process by which the digestive system removes waste from the body.

8-Ounce Servings

A measurement term commonly used in dietary guidelines to specify the volume of a single serving of a beverage or liquid food item, equivalent to one cup.

Dietary Fiber

Indigestible components of plant foods that aid in digestion, help regulate blood sugar, and reduce cholesterol levels.