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# If we reduce the rate of income taxation, people will spend a larger

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Math Expert
Joined: 02 Sep 2009
Posts: 58402
If we reduce the rate of income taxation, people will spend a larger  [#permalink]

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15 Jan 2019, 00:33
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Difficulty:

35% (medium)

Question Stats:

72% (01:37) correct 28% (01:59) wrong based on 83 sessions

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If we reduce the rate of income taxation, people will spend a larger portion of their gross incomes on consumer goods.This will stimulate economic growth and result in higher salaries and thus in higher government revenues, despite a lower rate of taxation.

Which one of the following arguments most closely resembles the reasoning in the statements above?

A) If we reduce the amount of overtime our employees work, production costs will decline and our total income will thus increase.
B) If we make it harder to participate in the school lunch program,people will have to pay for more of their food and the farm income will therefore increase.
C) If a movie is classified as obscene, more people will want to see it and the morals of the general community will be corrupted more than they would be otherwise.
D) If we give our employees more paid holidays, their efficiency while actually on the job will improve and our total productivity will thus increase.
E) If we give our children more spending money,they will learn to manage their finances better and will thereby realize the virtue of thrift.

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Joined: 22 May 2017
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Re: If we reduce the rate of income taxation, people will spend a larger  [#permalink]

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16 Jan 2019, 08:07
I find this type of qstns tricky.
Can anyone help in understanding to crack these
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Re: If we reduce the rate of income taxation, people will spend a larger   [#permalink] 16 Jan 2019, 08:07
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