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Is it true that government revenues are increased as a result of lower tax rates?
Wiki User
∙ 16y ago
It is true to a point. The Laffer curve shows that revenues increase as the tax rates rise (0 tax rate = 0 revenue) up to a point, but the increase slows as the rate rises higher and at some point total revenue begins to decline. If your incremental tax rate is 1% and you can work 4 hours to make $100, you will get to keep $99 and most people would be willing to do this. You would probably still be willing to work the extra hours if you were taxed 5 or 10%. But if you were subject to an incremental rate of 99%, you wouldn't work that long knowing the government was only going to let you keep $1. The "magic number" seems to be somewhere around 15-20%. If the rates are above this, people aren't motivated to increase their earnings. Big corporations react the same way.
Wiki User
∙ 16y ago
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What is a fiscal policy tool used to stimulate the economy Reducing inefficient employment of resources Lower interest rates Increased imports Increased government purchases?
increased government purchases.
Which of these may result in lower investment lower prices and slower economic activity?
when government borrowing increases interest rates
What scenario may result in lower investment lower prices and slower economic activity?
When government borrowing increases interest rates.
What methods could the federal government use to stimulate the economy during a time when people were opposed to deficit spending?
The only way the federal government can lower taxes without contributing to a greater deficit is by cutting spending as well. This may either cause an increase in federal revenues through increased taxable income in a growing economy or have little to no effect in stimulating economic growth. The other way to stimulate the economy without increasing the deficit is eliminating regulations that create hurdles to businesses starting up and growing.
Why do Governments and economists worry about inflation?
Inflation is a general and sustained rise in the level of prices over two financial quarters in an economy. The government is worried about inflation because it has negative repercussions on its ability to achieve its macro- economic objectives. For example, inflation could result in higher unemployment. Firms seek to cut costs during a period of inflation and could lay off workers.
Which was the most direct result of the surplus food?
The most direct result of a surplus of food is typically a decrease in prices due to an oversupply in the market. This can lead to benefits such as increased access to affordable food for consumers and potential challenges for producers due to lower revenues.
Why did president kennedy propose to reduce taxes?
Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased - not a reduced - flow of revenues to the federal government.
What action did thomas Jefferson take to the lower the national debt?
The action Thomas Jefferson took to lower the national debt was that he streamlined government and increased sales of federal land.
What is a fiscal policy tool used to stimulate the economy Reducing inefficient employment of resources Lower interest rates Increased imports Increased government purchases?
increased government purchases.
Which of these may result in lower investment lower prices and slower economic activity?
when government borrowing increases interest rates
What actions did Thomas Jefferson's to lower the national debt?
Jefferson streamlined government and increased sales of federal land
What actions to Thomas Jefferson take to lower the national debt?
Jefferson streamlined government and increased sales of federal land
What are the advantages of lean manufacturing?
Primarily, lower manufacturing costs due to the elimination of wastes. Also, lean tecniques encourage production to be better matched to demand, which can result in improved response to customers. Overproduction is one of the wastes reduced or eliminated (and really the worst of them), and improved customer response and no overproduction can result in more control over pricing and margin. So, costs are reduced and revenues may be increased in a successful lean enterprise.
What scenario may result in lower investment lower prices and slower economic activity?
When government borrowing increases interest rates.
What Jefferson came to office what steps did he take to lower national debt?
He streamlined the bureaucracy and increased the sales of federal land. -Novanet
How have population changes affected some Northeast cities?
Population Declines Have Caused Lower Tax Revenues.
What actions did Thomas Jefferson take lower the National debt?
Jefferson streamlined government and increased sales of federal land
