In the Market for Books, Initially There Are No Taxes

question 212

Multiple Choice

In the market for books, initially there are no taxes on books. Books are normal goods. The government introduces a tax of $4 a book and, at the same time, people's income fall by $4,000 a year. Following these two changes, the equilibrium quantity of books

• A) decreases.
• B) increases.
• C) remains unchanged.
• D) either increases or decreases. We cannot say which.

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Definitions:

National Front

A political party or movement in various countries, often characterized by its nationalist, xenophobic, or far-right ideologies.

Algerian War

A conflict between France and the Algerian National Liberation Front from 1954 to 1962, leading to Algeria gaining its independence from France.

Common Currency

A common currency refers to a monetary system in which multiple countries or territories use the same currency, facilitating trade and economic policy coordination.

Nationalist Party

A political party that aims to promote the interests of a particular nation or group of people, especially in terms of self-governance and sovereignty.