Producers Will Bear a Larger Burden of a Sales Tax

question 152

Multiple Choice

Producers will bear a larger burden of a sales tax if

• A)demand is relatively elastic and supply is relatively inelastic.
• B)demand is relatively inelastic and supply is relatively elastic.
• C)both demand and supply are relatively inelastic.
• D)both demand and supply are relatively elastic.
• E)the tax is collected by firms rather than remitted directly to the government by consumers.

Understand the effects of monetary policy on aggregate demand and real GDP.

Identify the role of money demand and how it shifts in different economic situations.

Analyze the impact of changes in money supply on planned investment and nominal GDP.

Grasp the significance of certain inflation targets set by the Federal Reserve.

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Definitions:

Daily Demand

The total quantity of a good or service that consumers are willing and able to purchase at a given price on any given day.

Tax

A financial charge imposed by a government on individuals, entities, or transactions to fund public services and projects.

Modernist Painters

Artists who embraced new methodologies and perspectives, rejecting traditional forms and narratives, during the modern art movement spanning the late 19th and early 20th centuries.

Demand Function

An equation that mathematically represents the relationship between the demand for a good and its determinants, such as price, income, and price of related goods.