If a Tax Cut of 3 Percent Causes the Output

question 73

Multiple Choice

If a tax cut of 3 percent causes the output supplied to increase by 6 percent,the absolute value of the tax elasticity of supply is

• A)0.5.
• B)2.0.
• C)6.0.
• D)18.0.

---

Definitions:

Notes Receivable

An asset on the balance sheet representing the right to receive payments from a debtor under the terms of a promissory note.

Noncurrent Assets

Long-term resources owned by a company, such as property, plant, equipment, and intangible assets, expected to provide value beyond the immediate fiscal year.

Unearned Fees

Income received by a business for services yet to be provided or goods to be delivered; recognized as a liability until the service or good is delivered.

Current Liability

A company's financial obligations that are due to be settled within one year or within the normal operating cycle.