A Local Government Currently Has a Tax Base of $4

question 30

Multiple Choice

A local government currently has a tax base of $4 billion and a tax rate of 5 percent. If the tax rate is increased to 6 percent, the tax base will decrease to $3.2 billion. If the goal is to maximize tax revenues the tax rate should be

• A) raised above 6 percent.
• B) kept at 5 percent.
• C) raised to 6 percent.
• D) abolished.

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Definitions:

White-Label Goods

products produced by one company but packaged and sold under another company's brand, often allowing for customization by the reselling company.

Physically Entering

The act of going into a specific space or location in person, as opposed to virtually or in an abstract sense.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Greenfield Operations

Business ventures that start from scratch in a new territory or market, without any prior operations or constraints.