Which of the Following Statements Is Correct Regarding the Imposition

question 23

Multiple Choice

Which of the following statements is correct regarding the imposition of a tax on gasoline?

• A)The incidence of the tax depends upon whether the buyers or the sellers are required to remit tax payments to the government.
• B)The incidence of the tax depends upon the price elasticities of demand and supply.
• C)The amount of tax revenue raised by the tax depends upon whether the buyers or the sellers are required to remit tax payments to the government.
• D)The amount of tax revenue raised by the tax does not depend upon the amount of the tax per unit.

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Definitions:

Free Trade Area

A region where a group of countries has agreed to reduce or eliminate trade barriers among themselves, such as tariffs and import quotas.

United States, Mexico, Canada

Refers to the countries involved in the USMCA trade agreement, which is designed to promote trade, strengthen economic relations, and support mutual economic growth.

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

MIGA

The Multilateral Investment Guarantee Agency, part of the World Bank Group, that offers political risk insurance to companies investing in developing countries.