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In the economy of Jamesland, GDP is currently $3500million. Production in Jamesland is unaffected by changes in tax rates until the rate is more than
In the economy of Jamesland, GDP is currently $3500million. Production in Jamesland is unaffected by changes in tax rates until the rate is more than 10%. Thereafter, for each 2-percent increase in the tax rate, GDP drops by $200 million. A. Complete the table below for the government of Jamesland. Tax revenue is GDP times the tax rate.% Tax Rate GDP Tax Revenue 0 3500 2 3500 70 3500 140 10 12 14 16 18 20 22 24 26 28 30 1500 450B. The optimal tax rate to maximize tax revenue is 96. This optimal tax rate results in tax revenue of $ million
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