CIPS Exam A6 Topic 1 Question 50 Discussion

Actual exam question for CIPS's A6 exam

Question #: 50
Topic #: 1

According to economic theory, which of the following best describes what should happen to the sales of a product if the government increases the tax on them?

AThe sales increase

BThe sales decrease

CThe sales remain the same

DThe sales double.

Show Suggested Answer

Suggested Answer: C

by Colette at Apr 26, 2024, 03:43 PM

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Patria

5 months ago

Depends on elasticity, but usually demand drops. So, B makes sense.

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Katina

5 months ago

But what if people still need the product? Could it remain the same?

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Maryann

6 months ago

I put the same. More tax will make products more expensive.

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Delsie

6 months ago

Agreed. Higher tax generally means lower sales.

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Patria

6 months ago

Yeah, the best choice must be B) The sales decrease, right?

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Katina

6 months ago

Hey, the question on product sales tax was tricky.

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