Congress would like to increase tax revenues by 20 percent. Assume that the average taxpayer in the United States earns $55,000 and pays an average tax rate of 30 percent.

a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 20 percent increase in tax revenues? (Round your answer to 2 decimal places.)

Average tax rate %

b. This is an example of what type of forecasting?

Static
Dynamic