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What are the market forces?
Supply, demand, capital, labor--laws. Tariffs and taxes have an effect on the economy, too.
A state government wants to increase the taxes on cigarettes to increase tax revenue This tax would only be effective in raising new tax revenues if the price elasticity of demand is?
elastic
How does the incidence of a tax use the price elasticity of supply and demand?
If the demand is perfectly elastic in prices (that is, demand falls to zero if the price for consumers is raised even the slightest bit), then the entire tax incidence falls on the producer since the producer would rather face the entire tax burden than lose all his consumers. And if the demand is perfectly inelastic (doesn't change with change in commodity price) then the entire burden falls on the consumers. So higher the price elasticity of demand, higher would be the share of taxes borne by the producer. And higher the price elasticity of supply, lower the share borne by the producer, by similar logic.
What is the Practical application of law of demand and supply in economics?
The law of demand denotes that a drop in the rate of a commodity hikes the volume demanded. The price elasticity of demand measures the volume demanded responds to a variation in price. Demand for a commodity is said to be elastic if the volume demanded reacts considerably to variations in price. Demand is said to be inelastic if the volume demanded reacts only slightly to variations in the price. The price elasticity of demand for any commodity measures how enthusiastic consumers are to shift from the commodity as its price hikes. Therefore, the elasticity reproduces the many economic, social and psychological forces that shape consumer tastes. Depending on familiarity, nevertheless we can denote common rules about what ascertains the price elasticity of demand.
Which of these is not one of the ways in which the Federal Reserve can affect the country's monetary policy?
It can spend more revenue and/or lower taxes to stimulate demand.
What are the market........?
Supply, demand, capital, labor--laws. Tariffs and taxes have an effect on the economy, too.
How do the indirect taxes affect the private business?
Indirect taxes causes an increase in prices... But, first we would see the price elasticity of the product, that the business sells. If the price elasticity is high, then, the increase in prices would result in less sales. resulting in low profits. On the other hand, if the price elasticity is low, it would not affect the business much. This is because the product would be in demand and people would be buying it because it costs a small proportion of the income or it is a basic necessity, for example: Bread. For this business, there would be a very small change in sales revenue and hence, profits.
What are the market forces?
Supply, demand, capital, labor--laws. Tariffs and taxes have an effect on the economy, too.
A state government wants to increase the taxes on cigarettes to increase tax revenue This tax would only be effective in raising new tax revenues if the price elasticity of demand is?
elastic
How does the incidence of a tax use the price elasticity of supply and demand?
If the demand is perfectly elastic in prices (that is, demand falls to zero if the price for consumers is raised even the slightest bit), then the entire tax incidence falls on the producer since the producer would rather face the entire tax burden than lose all his consumers. And if the demand is perfectly inelastic (doesn't change with change in commodity price) then the entire burden falls on the consumers. So higher the price elasticity of demand, higher would be the share of taxes borne by the producer. And higher the price elasticity of supply, lower the share borne by the producer, by similar logic.
What is the Practical application of law of demand and supply in economics?
The law of demand denotes that a drop in the rate of a commodity hikes the volume demanded. The price elasticity of demand measures the volume demanded responds to a variation in price. Demand for a commodity is said to be elastic if the volume demanded reacts considerably to variations in price. Demand is said to be inelastic if the volume demanded reacts only slightly to variations in the price. The price elasticity of demand for any commodity measures how enthusiastic consumers are to shift from the commodity as its price hikes. Therefore, the elasticity reproduces the many economic, social and psychological forces that shape consumer tastes. Depending on familiarity, nevertheless we can denote common rules about what ascertains the price elasticity of demand.
Which of these is not one of the ways in which the Federal Reserve can affect the country's monetary policy?
It can spend more revenue and/or lower taxes to stimulate demand.
What are market forces?
Supply, demand, capital, labor--laws. Tariffs and taxes have an effect on the economy, too.
In an aggregate demand-aggregate supply diagram what will equal decreases in government spending and taxes do?
No effect. Spending will decrease Aggregate Demand, lower taxes will raise Aggregate Demand
What ways does government affect supply and demand?
1st way of government policy to affect demand/supply is through price ceilings and price floors. By price ceiling it means that goods have to be sold below this price and price floors means that goods have to be sold above this price set. When price is forced down, suppliers will supply less and consumers will demand for more causing shortage, vice versa, when price is high, supplier will provide more and consumer will demand less causing surplus. 1 such example is price floor on agricultural. 2nd way where government policy affect demand/supply is through enforcing or altering taxes, minimum wage rate, subsidies and so on. Removing tax and increasing minimum wage rate increases disposable income of consumers which ultimately increase demand of good for normal goods and decrease demand of good for inferior goods. Hence, increasing tax and decreasing minimum wage rate will have the opposite effect. Increasing subsidies for producers will reduce their cost of production which will increase the suppliers willingness and ability to produce goods and services. -- By Johan Chua Song Yi
The government of Pakistan has introduced tax in real estate market in recently presented budget of 2009-10 In your view what will be the effect of taxation in this sector?
The government of Pakistan has introduced a number of taxes in the real estate market in the recently presented budget of 2022-23. These taxes include: Advance tax on sale or purchase of immovable property: This tax is payable by the purchaser of a property at the time of purchase. The rate of tax is 2% for filers and 5% for non-filers. Deemed rental income tax: This tax is payable by the owner of a property if the property is not being used for residential or commercial purposes. The rate of tax is 5% of the fair market value of the property. Capital gains tax: This tax is payable on the profit earned from the sale of a property. The rate of tax is 20%. The effects of these taxes on the real estate market are still uncertain. However, it is likely that the taxes will have a number of negative effects, including: Reduced demand for property: The taxes will make it more expensive to buy and own property, which could lead to a decrease in demand for property. Reduced investment in the real estate sector: The taxes could discourage investment in the real estate sector, which could lead to a slowdown in the growth of the sector. Increased black market activity: The taxes could lead to an increase in black market activity in the real estate sector, as people try to avoid paying taxes. The government of Pakistan has said that the taxes are necessary to raise revenue and to regulate the real estate market. However, it is important to note that the taxes could have a number of negative effects on the real estate market. It will be important to monitor the effects of the taxes to see how they impact the market.
An increase in taxes shifts the aggregate demand curve to the?
Left
