Jurisdiction F Levies a 10% Excise Tax on the Purchase

question 7

Multiple Choice

Jurisdiction F levies a 10% excise tax on the purchase of golf carts.The annual revenue from this tax averages $800,000 (10% * $8 million average annual golf cart purchases) .Jurisdiction F is considering raising the tax rate to 12%.Which of the following statements is true?

• A)The rate increase will increase revenue by $160,000.
• B)Based on a dynamic forecast,the rate increase will increase revenue by $160,000.
• C)Based on a static forecast,the rate increase will increase revenue by $160,000.
• D)None of the above is true.

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Definitions:

Systematic Observation

An observational method that involves structured, consistent procedures for recording and analyzing phenomena.

Quasi-experimental Research

A research design that attempts to establish a cause-and-effect relationship but does not rely on random assignment.

Observational Research

Research methods involving the systematic and objective observation of naturally occurring behavior or events.

Spank

A form of physical punishment involving striking the buttocks.