Answer:
A. There is a tax rate at which tax revenues are maximized.
Explanation:
By Laffer Curve definition we can easily understand the relationship between tax rate and tax revenues. It was developed by Arthur Laffer. The Laffer Curve describes that:
- with an optimal tax rate government maximizes total tax revenues
- there is no tax revenue collection at the two extreme tax rates of 0% and 100%
- at the left side of the curve higher tax rates decrease the incentive to work and invest. As a result this leads to to decrease in total tax revenue.
Answer:
0.03%
Explanation:
Southwestern Bank
The Effective annual interest rate of Southwestern bank compounded monthly would be
First step
Calculation for the Effective annual rate of Riverside Bank:
rR = (1 + (0.065/12))^12 = 1.067
Second step
Calculation for the Effective annual rate of Midwest Bank:
rM = (1 + (0.07/1))^1 = 1.07
The effective annual rate of Midwest Bank is higher by :
(1.07 -1.067)
=0.003 % or 0.3%
Therefore the higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern would be 0.03%
Answer:
B. a fixed-price contract.
Explanation:
"A fixed price contract places minimum administrative burden on the contracting parties, but subjects the contractor to the maximum risk arising from full responsibility for all cost escalations. Also called firm price contract."
Mr. Plow couldn't come back to Springfield because he took full responsability for all cost escalations.
Reference: WebFinance Inc. “What Is Fixed Price Contract? Definition and Meaning.” BusinessDictionary.com, 2019
The answer is d: to protect against high prices
