If an Excise Tax Is Imposed on a Good or Service

question 40

Multiple Choice

If an excise tax is imposed on a good or service,

• A) the supply curve shifts upward
• B) the supply curve shifts downward
• C) the price paid by consumers decreases
• D) the net price received by sellers increases
• E) the quantity produced and sold increases

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Definitions:

Par Value

The face value of a bond or the stock value stated in the corporate charter, often used in legal documents.

Effective Annual Yield

Effective annual yield is the return on an investment expressed as an annualized rate, accounting for compounding over a period, providing a more accurate measure of profitability.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, incorporating both interest payments and the capital gain or loss due to the difference between the purchase price and the maturity value.