Suppose the Federal Government Doubles the Gasoline Tax

question 130

Multiple Choice

Suppose the federal government doubles the gasoline tax. The deadweight loss associated with the tax

• A)also doubles.
• B)triples.
• C)quadruples.
• D)rises by a factor of 8.

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Definitions:

Return on Equity

A measure of a corporation's profitability, indicated by the amount of net income returned as a percentage of shareholders equity.

Return on Assets

A financial ratio indicating how efficiently a company uses its assets to generate profit.

Equity Multiplier

An equity multiplier is a financial ratio that measures the proportion of a company’s total assets financed by its shareholders' equity, demonstrating the degree of financial leverage being used.

M

Typically represents the mean or average in statistical contexts.