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The theory that tax cuts could increase government revenues is known as the Laffer Curve. It posits that there is an optimal tax rate that maximizes revenue; if tax rates are too high, they may discourage work and investment, leading to lower overall tax revenues. Conversely, reducing tax rates could stimulate economic activity, potentially leading to higher revenues despite the lower rates. However, the effectiveness of this theory is widely debated among economists.
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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
Contrast the social contract theory of government with the divine right theorywhat type of government would result from each theory?
contrast the social contract theory of government with the divine right theory. what type of government would result from each theory?
What would most likely occur if the government's priority was to increase government expenditures?
increase taxesincrease taxesincrease taxes.
Which level of government is most likely to receive revenues from parking permits?
A city government is likely the issuer of parking permits for city streets, and would obtain the revenue.
When would an increase in government purchases be an appropriate countercyclical fiscal policy?
A decrease in government spending and increase in taxes.
How does elasticity a company's pricing policy?
If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
If the London underground raised its fares by 10 percent which it estimates would cause the number of tickets sold to fall by 2 percent what would total revenues do?
They would increase by 7.8%.
What is fully taxable equivalent basis?
The taxable equivalent basis (teb) adjustment increases GAAP revenues and the provision for income taxes by an amount that would increase revenues on certain tax-exempt securities to a level that would incur tax at the statutory rate, to facilitate comparisons.
Is sales return a revenue or expenses?
It's a contrarevenue. It would show up in the revenue section but as a debit as opposed to a credit. A return would decrease your revenues but not increase your expenses.
Is sales return revenue or expense?
It's a contrarevenue. It would show up in the revenue section but as a debit as opposed to a credit. A return would decrease your revenues but not increase your expenses.
How does elasticity affect a companys pricing policy?
If demand is elastic at the current price, the company knows that an increase in price would reduce total revenues.
Why would a firm raise the price of a product after a producer determines that the demand for one of its products is inelastic?
The firm would raise the price because the firm's total revenues would probably increase.
