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2 years ago

Which of the following statements about taxation is TRUE?

Business

1 answer:

xeze [42]2 years ago

4 0

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.

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Which of the following institutions makes up the largest part of the Federal Reserve System organization

vlada-n [284]

The Correct answer choice for question 1 is : <u>Federal Reserve Banks</u>

<h3>What is Federal Reserve Banks?</h3>

While the Board of Governors is a sovereign government agency, the Federal Reserve Banks are set up like private companies. Member banks hold stock in the Federal Reserve Banks and earn profits. The Federal Reserve's interest is determined principally from the interest on U.S. government securities that it has received through open market operations.

AND

The Correct answer choice for question 2 is : <u>Buy government securities</u>

<h3>What is Recession?</h3>

A recession is a business cycle recession which occurs in a general slowdown in financial activity. Macroeconomic indicators such as GDP, finance spending, capacity utilization, household income, business profits, and inflation fall, while failures and the unemployment rate rise.

Therefore, we can conclude that the correct option of 1 is (B) and 2 is (A).

Your question is incomplete, but most probably your full question was:

1. Which of the following institutions makes up the largest part of the Federal Reserve System organization?

A. Board of Governors

B. Federal Free Market Committee

C. Federal Reserve Banks

D. Member banks and other depository institutions

2. If the United States falls into a recession, which action would the Federal Reserve take to encourage employment?

A. Buy government securities

B. Increase reserve requirements

C. Raise federal funds and prime rates

D. Sell government securities

Learn more about Federal Reserve System on:

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7 0

2 years ago

A rise in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate.

Kisachek [45]

A rise in the domestic real interest rate would cause a fall in net exports and a RISE in the exchange rate.

In general, businesses and consumers spend less when interest rates are high. This is because borrowing money costs more when interest rates are high. As a result, companies frequently turn to the stock market to raise money, which can cause stock values to decline.

An increase in interest rates causes the local currency to appreciate. In comparison to domestic goods and services, import prices decline. Exports see a decline in profitability and competition. Exports decline while imports rise, reducing the net export portion of total demand and spending.

To learn more interest rate would cause a fall in net exports and a RISE about:

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5 0

1 year ago

Assume that the international Fisher effect (IFE) holds between the U.S. and the U.K. The U.S. inflation is expected to be 5%, w

Lesechka [4]

Answer:C. Real interest rates expected by British investors are 2 percentage points higher than the real interest rate expected by US investor.

Explanation:

The real interest rate is the market interest rate less the inflation rate.

The inflation rate always reduce the purchasing power of money which is the real measure of the purchasing power of money and not the money face value.

6 0

2 years ago

If the government uses tax money to pay for long-term investments such as roads or other infrastructure, what happens to the eco

coldgirl [10]

Is this a theory type of question?

If it is and if it took place under president Calvin Coolidge then taxes likely would have gone up.

If you are talking about now, then investment might go up but in order to pay for it, the government will just print more money, so that taxes shouldn't go up.

I'd pick C.

4 0

3 years ago

Read 2 more answers

It is not possible for abandonment options to decrease a project's risk as measured by the project's coefficient of variation.

Tatiana [17]

This is false abandonment options should decrease a project's risk.

4 0

2 years ago