If the governmentʹs 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 net tax rate reduces disposable income because individuals and businesses have less after-tax income. However, net tax revenue increases because the government collects more taxes from the same level of national income.

If the Governmentʹs Net Tax Rate Increases, Then for a Given