To avoid an increase in the local property tax, Sullivan County, New York, proposed a 2 percent hotel tax, which presumably would be passed on to tourists. The hotel industry argued that the tax would hurt hotel business. They are really arguing that
a. tourist and convention demand is inelastic, so hotel bookings will decline.
b. tourist and convention demand is very elastic, so hotel bookings will decline.
c. they would prefer a property tax increase instead.
d. it is unfair to tax people who do not live in the area.
b
You might also like to view...
Joe likes peanut butter and jelly sandwiches for lunch. We can conclude that for Joe the cross elasticity of demand for peanut butter with respect to jelly is
A) positive because jelly and peanut butter are substitutes. B) positive because jelly and peanut butter are complements. C) negative because jelly and peanut butter are substitutes. D) negative because jelly and peanut butter are complements.
According to Gordon, the three main ingredients in the recent U.S. housing bubble are
A) low interest rates, saving glut, and financial innovation. B) high interest rates, lack of savings, and financial innovation. C) financial innovation, expansionary fiscal policy, and capital outflow. D) capital outflow, budget deficit, and trade deficit.
The central bank of Rudisia purchases government bonds by using the money that commercial banks keep as deposits with the central bank. It pays an interest of 2 percent on the deposits and charges the commercial banks about 2.5 percent per check for processing checks. It sends back the extra money to the government treasury. Therefore, it can be said that: a. the central bank of the country is
financially self-supporting. b. the central bank of the country acts as the treasurer of the government. c. the central bank of the country acts as the lender of the last resort of the government. d. the central bank of the country ensures that the deposits of customers are insured.
When the Federal Reserve conducts an open-market purchase, the money supply _____ and aggregate demand _____
Fill in the blank(s) with correct word