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Suppose That in a Certain Nation,the Flat Income Tax Rate

Question 53

Multiple Choice

Suppose that in a certain nation,the flat income tax rate of 70 percent falls to 65 percent and as a result the tax base rises from $500 billion to $575 billion.As a result,tax revenues __________,indicating the nation is on the __________ portion of its Laffer curve.


A) rise; upward-sloping
B) rise; downward-sloping
C) fall; upward-sloping
D) fall; downward-sloping

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