If the Government Imposes an Excise Tax on Cars Equal

question 91

Multiple Choice

If the government imposes an excise tax on cars equal to $5,000 per automobile, the supply of automobiles will shift to the:

• A) left and the price of automobiles will increase by $5,000.
• B) left and the price of automobiles will increase by an unknown amount.
• C) right and the price of automobiles will decrease by $5,000.
• D) right and the price of automobiles will decrease by an unknown amount.

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by changes in real GDP.

Population Decline

A decrease in the number of people in a population due to factors such as lower birth rates, higher death rates, or migration.

Technology

The application of scientific knowledge for practical purposes, especially in industry and in the development of innovations.

Labor Productivity

A measure of economic performance that compares the amount of goods and services produced with the hours worked to produce them.