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2 years ago

Which of the following scenarios is consistent with the Laffer curve?

Business

1 answer:

sergejj [24]2 years ago

3 0

Answer:

No option is correct.

a. An increase in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates increase beyond the optimal level, instead of increasing total revenue they will decrease it.
b. The tax rate is 1 percent, and tax revenue is very high. ⇒ FALSE, very low tax rates will result in very low government revenue.
c. The tax rate is 99 percent, and tax revenue is very high. ⇒ FALSE, very high tax rates will result in very low government revenue.
d. A decrease in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates decrease beyond the optimal level, instead of increasing total revenue they will decrease it.

Explanation:

According to Arthur Laffer, a direct and sometimes inverse relationship exists between tax rates and government revenue. Sometimes a lower tax rate can result in higher government revenue. But that is not always the case. Sometimes an increase in the tax rate can increase government revenue. The optimal tax rate (T*) is equal to the tax rate that will allow the government to collect the highest amount of revenue. Any lower or higher tax rate will decrease government revenue.

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Assume that you have invested $100,000 in Japanese equities. When purchased, the stock's price and the exchange rate were ¥100 a

natima [27]

Answer:

4.76%

Explanation:

The computation of dollar rate of return is shown below:-

Initial investment in USD = 100,000

Converted to Japanese Yen at Yen 100 ÷ 1 USD = 10,000,000

Stock Price in Yen = 100

Number of shares purchased = 100,000

At year end sale price at 110 = 11,000,000

Out of this proceed, the investor will sold 10,000,000 Yen as per Forward contract at 105 Yen/USD and rest 1,000,000 at 110 Yen/USD

Dollar Proceed Equivalent USD

10,000,000 Yen at 105 Yen/USD 95,238

(10,000,000 ÷ 105)

1,000,000 Yen at 110 Yen/USD 9,091

(1,000,000 Yen ÷ 110)

Dollar proceed 104,329

Return as a Percentage = ((Sale value - Purchase value) ÷ Purchase value) × 100

= (($95,238 - $90,909) ÷ $90,909) × 100

= $4,329 ÷ $90,909 × 100

= 4.76%

8 0

2 years ago

In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundr

MissTica

Answer:

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

In a perfect monopoly, there is only one firm operating in the industry

In a monopolistic competition, differentiated products are sold

In an oligopoly, there are few large firms

8 0

1 year ago

A nine-year project is expected to generate annual revenues of $137,800, variable costs of $82,600, and fixed costs of $11,000.

AleksAgata [21]

Answer:

Option (a) is correct.

Explanation:

Given that,

Annual revenues = $137,800,

variable costs = $82,600

Fixed costs = $11,000

Annual depreciation = $23,500

Tax rate = 34 percent

Annual Income before Taxes:

= Annual revenues - Variable cost - Fixed Costs - Depreciation

= $137,800 - $82,600 - $11,000 - $23,500

= $20,700

Net income:

= Annual Income before Taxes × ( 1 - T)

= $20,700 × 0.66

= $13,662

Annual operating cash flow:

= Net income + Depreciation

= $13,662 + $ 23,500

= $37,162

3 0

2 years ago

Sean works in San Jose, California, but her teammates work in Israel, Germany, and India. Together, they create coding GPS syste

stellarik [79]

Sam / she or he is a part of Firmament

3 0

2 years ago

People of lower socioeconomic status are more likely to smoke tobacco, but the data collected does not indicate why. However, wi

Stells [14]

Answer:

Option A "Qualitative" is the right option.

Explanation:

Qualitative approaches usually involve data analysis models and techniques from some kind of wide range of functional professional disciplines.
This same occurrence we were also willing to take part though is that smoker's behavior patterns with a relatively low socio-economic designation have been qualitative. Individual qualities as well as other qualities are indeed qualitative research.

And the above response is the appropriate one.

5 0

2 years ago