Dynamic Tax Analysis Generally Predicts

question 2

Multiple Choice

Dynamic tax analysis generally predicts

• A) that the higher the tax rate is, the higher the tax revenue will continue to be into the future.
• B) that the higher tax rates lead to higher revenues only to a point at which revenues will begin to decrease due to a diminishing tax base.
• C) that lower tax rates will always and continuously lead to increased tax revenues.
• D) that lower tax rates are always going to lead to decreased tax revenues.

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Definitions:

Concurrent Validity

The construct validity of a measure is assessed by examining whether groups of people differ on the measure in expected ways.

Face Validity

Refers to the extent to which a test appears to measure what it claims to measure, based on superficial judgment.

Convergent Validity

A type of validity that assesses whether measures that should be related, based on the study hypotheses, are actually related.

Discriminant Validity

The extent to which a test or measure differentiates between distinct groups or constructs, showing it is not correlating too highly with measures from different constructs.