Dynamic forecasting does not take into consideration taxpayers' responses to a tax change when estimating tax revenues.

Question

Quizplus · Accepted Answer

Dynamic forecasting does take into consideration taxpayers' responses to a tax change when estimating tax revenues. This is because it takes into account how a tax change may impact economic activity and behavior, leading to changes in taxable income, spending, and other factors.

Dynamic Forecasting Does Not Take into Consideration Taxpayers' Responses to a Tax