If Demand and Supply Are Both Very Inelastic,a Decrease in the Rate

question 194

Multiple Choice

If demand and supply are both very inelastic,a decrease in the rate of an excise tax will likely:

• A)decrease government revenue.
• B)increase government revenue.
• C)not affect government revenue.
• D)make demand and supply both elastic.

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Definitions:

Degree Program

A course of study at a college or university that leads to the attainment of a specific academic degree, such as a bachelor's or master's degree.

Foreign Tax Credit

A tax credit that allows taxpayers to offset income tax paid to foreign countries against their U.S. tax liability to avoid double taxation.

U.S. Income Tax

A charge imposed by the U.S. federal government on the yearly income of individuals, companies, trusts, and various legal bodies.

Foreign Government

It refers to the government of a country other than one's own.