If We Wanted to Analyze the Effects of a $2

question 87

Multiple Choice

If we wanted to analyze the effects of a $2 unit tax graphically, we would shift the

• A) supply curve upward by $2.
• B) supply curve downward by $2.
• C) demand curve upward by $2.
• D) demand curve downward by $2.

---

Definitions:

Bank Account

A financial account maintained by a bank for a customer, allowing the deposit and withdrawal of money and the accrual of interest.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, per unit of time.

Loanable Funds

The money available for borrowing in the financial markets, determined by the savings behavior of individuals and institutions and the central bank's monetary policy.

Investment Spending

Investment spending refers to expenditures made by businesses or individuals on capital goods intended to be used for future production.