Explain the Difference Between Forward and Backward Shifting of a Tax

question 64

Essay

Explain the difference between forward and backward shifting of a tax.

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Definitions:

Trade Deficit

An economic measure of a negative balance of trade where a country's imports exceed its exports over a given period.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for a unit of another currency.

Trade Flow

The movement of goods and services across borders, representing the import and export activities between countries.

Euro

is the official currency of 19 out of the 27 European Union countries, which together make up the Eurozone.