40. The most efficient tax system has a broad tax base and a low tax rate.A) TrueB) False41. Making the income tax more progressive by adding more tax brackets potentially canresult inA) stronger economic growthB) a more "equitable" taxC)no effect on equity or economic growthD) slower economic growth42. The Atlanta city council decides to double taxes on small business in the downtown areato raise more tax revenue to fund more social programs. From an economic growthperspective, why is this a misguided economic policy?A) it is not a bad policy; doubling taxes will automatically double tax revenueB) excessive taxes on business can result in reduced jobs, incomes and businesscreation because business simply moves to a new government jurisdiction.C) it is not a bad policy; raising taxes will double tax revenue, raise income levels, andencourage business creation.D) excessive taxes will provide more social benefits, so business will tolerateunusually high taxes and stay in the city.43. Under Supply-side economics, tax cuts have resulted in unequal distribution of incomebecause more people earned greater and greater income, not because, as some wouldargue, that the poor got poorer.A) TrueB) False44. Joe Biden's America, the Democrats plan to substantially raise taxes on everyone,especially the highest income earners, to pay for 100 trillion dollars in new governmentspending on the "New Green Deal". In terms of the Laffer curve, we can expectA) incentives to work, save and invest to be greatly diminishedB) the economy to be pushed into the prohibitive zone, thus actually reducing taxrevenues and having an increasing negative effect on economic growthC) fewer jobs and a reduced standard of living for all taxpayers, and limitedopportunity for job advancementD) all of the above45. Referencing question 44, the Biden plan must assume static scoring.A) TrueB) False

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40. The most efficient tax system has a broad tax base and a low tax rate. A) True B) False

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

40. The most efficient tax system has a broad tax base and a low tax rate.
A) True
B) False
41. Making the income tax more progressive by adding more tax brackets potentially can
result in
A) stronger economic growth
B) a more "equitable" tax
C)
no effect on equity or economic growth
D) slower economic growth
42. The Atlanta city council decides to double taxes on small business in the downtown area
to raise more tax revenue to fund more social programs. From an economic growth
perspective, why is this a misguided economic policy?
A) it is not a bad policy; doubling taxes will automatically double tax revenue
B) excessive taxes on business can result in reduced jobs, incomes and business
creation because business simply moves to a new government jurisdiction.
C) it is not a bad policy; raising taxes will double tax revenue, raise income levels, and
encourage business creation.
D) excessive taxes will provide more social benefits, so business will tolerate
unusually high taxes and stay in the city.
43. Under Supply-side economics, tax cuts have resulted in unequal distribution of income
because more people earned greater and greater income, not because, as some would
argue, that the poor got poorer.
A) True
B) False
44. Joe Biden's America, the Democrats plan to substantially raise taxes on everyone,
especially the highest income earners, to pay for 100 trillion dollars in new government
spending on the "New Green Deal". In terms of the Laffer curve, we can expect
A) incentives to work, save and invest to be greatly diminished
B) the economy to be pushed into the prohibitive zone, thus actually reducing tax
revenues and having an increasing negative effect on economic growth
C) fewer jobs and a reduced standard of living for all taxpayers, and limited
opportunity for job advancement
D) all of the above
45. Referencing question 44, the Biden plan must assume static scoring.
A) True
B) False

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