A Higher Rate Is Most Likely to Decrease the Amount

question 272

Multiple Choice

A higher rate is most likely to decrease the amount of revenue that the government collects from an excise tax if demand is _____ and supply is _____.

• A) elastic; elastic
• B) elastic; inelastic
• C) inelastic; elastic
• D) inelastic; inelastic

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; indicating the relative risk associated with investing in the stock.

Risk-Free Rate

The theoretical return on an investment with zero risk of financial loss, often represented by the yield on government securities.

Portfolio Expected Return

Portfolio expected return is the weighted average of the expected returns of the assets contained within an investment portfolio.

Expected Returns

The predicted amount of profit or loss an investment is projected to generate, often based on historical data or statistical models.