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Author Question: If your income and the price level both rise by 5 percent, and you think you now have more real ... (Read 68 times)

MirandaLo

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on: Jun 29, 2018
If your income and the price level both rise by 5 percent, and you think you now have more real income, you are suffering from
 
  A) diminishing marginal expectations.
  B) leakages.
  C) injections.
  D) money illusion.

Question 2

According to dynamic tax analysis, will continuing to push up the tax lead to steady increases in tax revenues? Why?
 
  What will be an ideal response?


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tanna.moeller

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Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

In dynamic tax analysis, the tax base will eventually decline for ever-higher tax rates. This means that tax revenues will eventually fall at sufficiently high tax rates.


MirandaLo

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

LVPMS

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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