Which of the Following Is True of an Excise Subsidy

question 68

Multiple Choice

Which of the following is true of an excise subsidy?

• A)An excise subsidy has a positive substitution effect but negative income effect on the consumption of the subsidized good.
• B)An excise subsidy increases consumption of the subsidized good more than a cash transfer of equal-cost.
• C)An excise subsidy leaves the well-being of the subsidy recipient unchanged.
• D)An excise subsidy causes consumption of nonsubsidized goods to increase.

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Definitions:

Marketing Strategies

Plans or approaches businesses use to promote their products, services, or brand to their target audiences, aiming to maximize sales and achieve a competitive advantage.

Machining Process

A manufacturing process involving the shaping of metal or other materials by cutting, boring, grinding, or other forms of deformation.

Manual Polishing

A finishing process involving the physical smoothing or enhancing of an item's surface by hand, without automated machinery.

Labour Hours

The total amount of working time expended by employees in the production of goods or services, measured in hours.