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-What Is the Effect on Tax Revenue If the Government

Question 59

Multiple Choice

-What is the effect on tax revenue if the government increases the excise tax on a product that has an elastic demand? A) It will rise. B) It will fall. C) It may rise or fall depending on whether the tax is a flat rate or a percentage of the price of the product. D) It is totally unpredictable.
-What is the effect on tax revenue if the government increases the excise tax on a product that has an elastic demand?


A) It will rise.
B) It will fall.
C) It may rise or fall depending on whether the tax is a flat rate or a percentage of the price of the product.
D) It is totally unpredictable.

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