To Finance Medical Care, the Federal Government Raises the Tax

question 154

Multiple Choice

To finance medical care, the federal government raises the tax per pack paid by sellers of cigarettes. Other things being equal, the price of cigarettes rises because of a(n) :

• A) upward movement along the supply curve for cigarettes.
• B) rightward shift of the supply curve for cigarettes.
• C) upward movement along the demand curve for cigarettes.
• D) leftward shift of the supply curve for cigarettes.

---

Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.

Monthly Social Security Benefits

The payments made to eligible recipients each month by the Social Security Administration, often based on retirement or disability status.

Retirement Account

A financial account designed for saving funds specifically for the period of life when an individual stops working.

Compounded Monthly

Compounding monthly refers to the addition of interest to the principal sum of a loan or deposit, calculated on a monthly basis, which results in earning interest on interest.