Does a Tax on Sellers Affect the Demand Curve

question 88

Multiple Choice

Does a tax on sellers affect the demand curve?

• A) Yes, it shifts to the left by the amount of the tax.
• B) Yes, it shifts to the right by the amount of the tax.
• C) Yes, it shifts up by the amount of the tax.
• D) No, there is change in the quantity demanded, but the demand curve does not move.

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Definitions:

Dissaving

The process where spending exceeds income, leading to a depletion of savings or accumulation of debt.

APC

The Average Propensity to Consume, which measures the fraction of income that households spend on goods and services rather than saving.

Disposable Income

The spendable income of households after income tax deductions tailored for saving and spending.

Disposable Income

The financial resources meant for household spending and saving after settling income taxes.