A Tax Elasticity of Supply Equal to

question 114

Multiple Choice

A tax elasticity of supply equal to .21 indicates that

• A) Employers will not hire any workers if tax rates increase.
• B) Employers will hire more workers if tax rates increase.
• C) Workers will not cut back on the number of hours worked if tax rates increase.
• D) Workers will cut back on the number of hours worked if tax rates increase.

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Definitions:

Foreign Exchange Gain

Profit arising from fluctuations in exchange rates which increase the value of foreign currency-denominated assets.

Exchange Rate

The valuation of a currency when converted to a different currency, which indicates the equivalent amount in the second currency.

Payment Date

The specific date on which dividends are actually paid out to shareholders or when a debt obligation must be repaid.

Controlling Influence

The power to govern the financial and operating policies of another entity through ownership, contract, or otherwise, often resulting in a parent-subsidiary relationship.