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:

Social Situations

Contexts where interactions among individuals occur, influenced by cultural norms and individual behaviors.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome.

Major Depressive Disorder

A mental disorder characterized by persistent and intense feelings of sadness or despair and a lack of interest in activities, impacting daily functioning.

Episodic

Relating to or consisting of distinct or separate events or experiences, often in the context of memory.