Governments like to know the price elasticity of demand because it helps them determine how changes in sales tax rates will affect:
A. tax revenues.
B. government spending.
C. income.
D. profits.
Answer: A
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If a fair game is played many times the monetary losses or gains will:
a. approach zero. b. be negative. c. be positive. d. result in an outcome that cannot be determined without more information.
Policy tools to influence the macroeconomy include
A. Wars, natural disasters, and trade disruptions. B. Tax policy, government spending, and the availability of money. C. External shocks and internal market forces. D. Population growth, spending behavior, and invention.
All else constant, an increase in the demand for bonds
A) increases the equilibrium quantity and the equilibrium price of bonds. B) increases the equilibrium quantity and decreases the equilibrium price of bonds. C) decreases the equilibrium quantity and increases the equilibrium price of bonds. D) decreases the equilibrium quantity and the equilibrium price of bonds.
When sellers have more information about the quality of a good than buyers do, a relatively large share of the goods in the market will be low-quality goods. This is the ________ problem.
A. free-rider B. law of diminishing returns C. adverse selection D. moral hazard