When a Tax Is Imposed on Consumers the Demand Curve

question 52

Multiple Choice

When a tax is imposed on consumers the demand curve will:

• A)shift downward by the amount of the tax.(True Answer )Correct
• B)shift upward by the amount of the tax.
• C)shift downward by less than the amount of the tax.
• D)not shift since sellers collect per unit taxes.

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Definitions:

Equity Sold

The process of selling ownership interest in a company in exchange for capital.

Net Capital Spending

The total expenditure on capital assets, minus any sales of existing assets.

Operating Cash Flow

Cash generated from a company's normal business operations, indicating the company's ability to generate sufficient positive cash flow to maintain and grow its operations.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all incomes and expenses except interest and income taxes.