If the government's net tax rate increases, then for a given level of national income disposable income will but net tax revenue will .
A)decrease; increase
B)decrease; decrease
C)not change; increase
D)increase; increase
E)increase; decrease

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 Government's Net Tax Rate Increases, Then for a Given