When USStock Prices Were Converted from Fractions to Decimals in 2001

question 25

Multiple Choice

When U.S.stock prices were converted from fractions to decimals in 2001 the minimum bid-ask spread charged by dealers ________.

• A) increased
• B) decreased
• C) remained the same
• D) fell at first, but then increased

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Definitions:

Indirect Taxes

Taxes that are not directly paid by an individual but instead are levied on goods and services, such as sales tax or value-added tax.

Federal Government

The national government of a federal country, which holds the authority to govern the federation as a whole.

Proportional Tax

A tax system where the rate of taxation is fixed and does not change based on the income level, meaning everyone pays the same percentage of their income in taxes.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of products like gasoline, tobacco, and alcohol.