Refer to the information provided in Figure 17.1 below to answer the questions that follow. Figure 17.1
-Refer to Figure 17.1. A cut in tax rates will decrease tax revenue if the economy moves from Point
A) A to B.
B) B to A.
C) C to B.
D) A to D.

Question

Refer to the information provided in Figure 17.1 below to answer the questions that follow.  Figure 17.1
-Refer to Figure 17.1. A cut in tax rates will decrease tax revenue if the economy moves from Point
A) A to B. 
B) B to A. 
C) C to B. 
D) A to D.

Quizplus · Accepted Answer

A cut in tax rates will decrease tax revenue if the economy moves from a point where tax rates are already low (Point B) to a point where they are even lower (Point A), as this would reduce the overall tax revenue collected.

Refer to the Information Provided in Figure 17