If the size of a tax increases,tax revenue
A)definitely increases.
B)definitely decreases.
C)definitely remains the same.
D)may increase, decrease, or remain the same.

Question

Quizplus · Accepted Answer

The relationship between the size of a tax and tax revenue is not always linear. If the tax increase causes a decrease in consumer spending or tax evasion, tax revenue may decrease. However, if the tax increase does not significantly affect consumer behavior, tax revenue may increase. Therefore, the tax revenue may increase, decrease, or remain the same.

If the Size of a Tax Increases,tax Revenue