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

Economics

You might also like to view...

A firm's labor demand curve is also its marginal revenue product curve. For both the perfectly competitive firm and the output price maker, the labor demand curve slopes downwards

However, there is a difference in the reasons why the labor demand curve slopes downwards. What is this difference?

Economics

When interest rates fall, a bank that perfectly hedges its portfolio of Treasury securities in the futures market

A) suffers a loss. B) experiences a gain. C) has no change in its income. D) may either gain, lose or see no change in its income.

Economics

The rule of 70 estimates how long it will take a country to:

A. double its real GDP per capita. B. achieve zero inflation. C. reach its maximum production capacity. D. double its output.

Economics

Suppose that a nation has adopted a fixed exchange rate with another country, and has a persistent trade deficit. What is most likely to happen?

a. a gradual increase in the value of its currency b. a gradual decrease in the value of its currency c. a "run" on its currency and a sudden appreciation d. a "run" on its currency and a sudden devaluation

Economics