If the government's net tax rate increases,then for a given level of national income disposable income will ________ and net tax revenue will ________.
A)decrease; decrease
B)decrease; increase
C)increase; increase
D)increase; decrease
E)not change; increase

Question

Quizplus · Accepted Answer

An increase in the government's net tax rate reduces disposable income because individuals have less income after taxes. However, net tax revenue for the government increases because it collects more taxes at the higher rate.

If the Government's Net Tax Rate Increases,then for a Given