If the Marginal Tax Rate Is Too High,it Can Cause

question 89

Multiple Choice

If the marginal tax rate is too high,it can cause all of the following except

• A)Businesses to produce more.
• B)Government tax receipts to decline.
• C)The rate of saving to decline.
• D)Work effort to decrease.

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Definitions:

Variable Cost

Expenses that fluctuate with the level of output or business operations, contrasting with fixed costs.

Fixed Cost

Costs that do not change with the level of output produced, such as rent, salaries, and insurance premiums.

Economic Profit

The difference between total revenue and total economic costs (including both explicit and implicit costs), reflecting a firm's financial performance.

Perfectly Competitive

A market structure characterized by many buyers and sellers, no barriers to entry, and a homogeneous product.