Congress would like to increase tax revenues by 10 percent. Assume that the average taxpayer in the United States earns $65,000 and pays an average tax rate of 15 percent.

Required:

1. If the income effect is in effect for all taxpayers, what average tax rate percentage will result in a 10 percent increase in tax revenues? (Note: Round your answer to 2 decimal places.)
2. This is an example of what type of forecasting? Dynamic or static?