Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate
A) determines how tax revenue will change as national income increases.
B) determines how much revenue the government will have to spend.
C) always equals the average tax rate which is harder to measure.
D) affects people's willingness to work, save, and invest.
D
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Suppose that government purchases of goods and services increase by $200 and at the same time lump-sum taxes increase by $200 . Which of the following is true in this case?
a. Whether the budget deficit will increase or decrease will depend on the value of the marginal propensity to consume. b. The budget deficit will increase by $200 c. The budget deficit will increase by $400. d. The budget deficit will decrease as the economy expands. e. There will be no change in the budget deficit.
Which of the following is most likely to be a major source of growth in per capita GDP?
a. A high investment / GDP ratio b. A high rate of inflation c. Rapid population growth d. Rapid growth in the money supply