Which of the Following Best Explains How Public Policy Creates

question 13

Multiple Choice

Which of the following best explains how public policy creates an underground market?

• A) by prohibiting goods or services or over-taxing them
• B) by prohibiting goods or services or lowering taxes on them
• C) by exporting goods to other countries
• D) by maintaining taxes on goods in the face of dwindling supply and demand

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Definitions:

Business Loan

A loan specifically intended for business purposes, where funds are lent to a business entity in exchange for future repayment of the loan principal amount along with interest or other finance charges.

Investor

An individual or entity that allocates resources with the expectation of achieving a financial return.

Creditor

An individual or entity that is owed money or has a claim to the assets of a debtor.

Statute Prohibits

A regulation enacted by a legislative body that forbids certain actions or conduct.