The Tax on Gasoline

question 488

Multiple Choice

The tax on gasoline

• A)reduces efficiency by causing large deadweight losses.
• B)reduces efficiency by decreasing consumer surplus and producer surplus.
• C)enhances efficiency by serving as a corrective device in a market with positive externalities.
• D)enhances efficiency by serving as a corrective device in a market with negative externalities.

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Definitions:

Progressed

Advanced or moved forward in development or improvement.

Nations

Vast collectives of individuals linked through shared ancestry, historical background, cultural practices, or linguistic similarities, residing in a specific nation or region.

Real GDP

The calculation of a nation's economic production, corrected for changes in prices due to inflation or deflation, to accurately represent the actual worth of the produced goods and services.

Economic Prosperity

A state of economic health in a country, characterized by a strong economy, low unemployment, and high levels of consumer spending.