Which of the Following Ideas Is the Most Plausible

question 15

Multiple Choice

Which of the following ideas is the most plausible?

• A)Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate.
• B)Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate.
• C)Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate.
• D)Reducing a tax rate can never increase tax revenue.

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Definitions:

Cash Flows

The movement of money into and out of a business, representing earnings and expenses.

Project A

A specified venture or task that has been named 'Project A' for identification purposes.

Interest-Only Loan

A type of loan where the borrower is required to pay only the interest on the principal balance for a set period, with the principal balance unchanged.

Principle Amount

The principal amount is the initial size of a loan or an investment, not including profits or interest.