Question

retail sales tax elasticity for California is 0.8. Which of the following would be accurate A....

retail sales tax elasticity for California is 0.8. Which of the following would be accurate

A. A 10% increase in state GDP will lead to a 8% increase in retail sales tax revenue.

B. California's  sales tax is elastic.

C. California state sales tax is buoyant

D. none of the above

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Retail sales tax elasticity is calculated as follows -

Retail sales tax elasticity = Percentage change in retail sales tax revenue/Percentage change in GDP

The retail sales tax elasticity for California is 0.8

This indicates that a 10% increase in the GDP of California leads to 8% increase in its retail sales tax revenue.

The value of the retail sales tax elasticity for California is less than 1.

This means that California's sales tax is inelastic.

Hence, the correct answer is the option (A).

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
New York's  personal income tax elasticity is equal to 0.8 and its buoyancy is equal to 1.2....
New York's  personal income tax elasticity is equal to 0.8 and its buoyancy is equal to 1.2. Of the following which would best explain the cause of this difference? A. The numbers have to be the same, this is an arithmetic error B. a change in policy, for example a tax rate change led to an increase in revenue. C. a change in policy, for example a tax rate change led to an decrease in revenue. D. The state's personal income...
5. Identify how total revenue changes if Demand is inelastic and price falls; a. Total revenue...
5. Identify how total revenue changes if Demand is inelastic and price falls; a. Total revenue falls b. Total revenue rises c. Total revenue remains constant d. None of the above 6. Identify how total revenue changes if Demand is elastic and price falls; a. Total revenue falls b. Total revenue rises c. Total revenue remains constant d. None of the above. ' 7. In the following pair of goods, which has the higher price elasticity of demand: (a) Airline...
(60)A perfectly inelastic demand curve has an elasticity coefficient of: (a)1 (b)0.25 (c)∞ (d)None of the...
(60)A perfectly inelastic demand curve has an elasticity coefficient of: (a)1 (b)0.25 (c)∞ (d)None of the above Akal mn wahed Extra Credit Questions-Optional (61)If the percentage change in the quantity supplied of a good is less than the percentage change in price, price elasticity of supply is: (a)Inelastic (b)Perfectly inelastic (c)Elastic (d)Unitary elastic (62)If the percentage change in the quantity demanded of a good is equal to the percentage change in price, price elasticity of demand is: (a)Inelastic (b)Perfectly inelastic...
7) Suppose a $2/unit tax is placed on a good. If the original equilibrium is (P...
7) Suppose a $2/unit tax is placed on a good. If the original equilibrium is (P = $13, Q = 500) and the new equilibrium is (P = $14.50, Q = 300), what is the producer tax burden? Group of answer choices a $1000 b $150 c $450 d $600 8) Which of the following is consistent with a demand curve that shows a larger percent change in price than its percent change in quantity? Group of answer choices a...
Jurisdiction B’s tax system consists of a 6.5 percent general sales tax on retail goods and...
Jurisdiction B’s tax system consists of a 6.5 percent general sales tax on retail goods and selected services. Over the past decade, the average annual volume of sales subject to this tax was $860 million. The jurisdiction needs to increase its tax revenues by approximately $8.6 million each year to finance its spending programs. The taxing authorities are considering two alternatives: a 1 percent increase in the sales tax rate or a new 2 percent tax on the net income...
So this question Is a bit confusing. 1. Which of the following would the Classical view...
So this question Is a bit confusing. 1. Which of the following would the Classical view predict would happen to the economy when there is a negative shock to wealth? A. It will lead to greater consumption which will decrease GDP and lower employment. B. It will lead to less consumption, which will decrease GDP and lower employment. C. It will lead to less consumption, which will increase GDP and raise employment. D. It will lead to greater consumption, which...
1) Which of the following would be something that would be included in the CPI but...
1) Which of the following would be something that would be included in the CPI but not the GDP deflator? Group of answer choices A) A computer game produced in San Jose and bought by consumers in Texas B) A golf ball produced in Cleveland and bought by consumers in California C) A box of Legos produced in Denmark is bought by consumers in New York D) A large amount of military uniforms are made in South Carolina and bought...
1.          Which, if any,ofthefollowingstatementsisnot accurate? a.         Every Codesectionhas a treasury regulation. b.      &
1.          Which, if any,ofthefollowingstatementsisnot accurate? a.         Every Codesectionhas a treasury regulation. b.         The current Code is the 1986 Code, as amended. c. None of the statements is accurate. 2.Which of the following statements is not accurate regarding effective dates in the InternalRevenueCode? a.        Sections of a new tax law may have different effective dates. b.       New provisions of the Internal Revenue Codedo not always go into effect immediately upon signing of the law by the President. c.        Some effective dates can precede passage of the act....
18.In which situation would consumers bear the highest incidence of a tax? a) an elastic demand...
18.In which situation would consumers bear the highest incidence of a tax? a) an elastic demand with an elastic supply b) an inelastic demand with an inelastic supply c) an elastic demand with an inelastic supply d) an inelastic demand with an elastic supply 19.Which of these is not a problem caused by an effective price ceiling being placed on the price of electricity? a) a reduced effort to improve quality of service b) a misallocation of resources c) a...
If a state increases the state sales tax rate from 7% to 10%, this rate increase...
If a state increases the state sales tax rate from 7% to 10%, this rate increase leads to an increase in tax revenues. Based upon what the Laffer curve tells us, which of the following statements is most correct: A. The optimal sales tax rate is greater than 10% B. This state would be on the upward sloping side of the Laffer curve C. The optimal tax rate is lower than 10% D. Not enough info
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT