Suppose the Tax on Automobile Tires Is Increased So That

question 16

Multiple Choice

Suppose the tax on automobile tires is increased so that the tax goes from being a "medium" tax to being a "large" tax.As a result,it is likely that

• A)tax revenue increases,and the deadweight loss increases.
• B)tax revenue increases,and the deadweight loss decreases.
• C)tax revenue decreases,and the deadweight loss increases.
• D)tax revenue decreases,and the deadweight loss decreases.

Analyze the impact of monetary and fiscal policies on inflation and unemployment.

Identify the effects of supply shocks on the economy's output, inflation, and the Phillips curve.

Grasp the concept of the short-run and long-run Phillips curves and their implications for monetary policy.

Recognize the role of expectations in influencing the unemployment and inflation outcomes.

---

Definitions:

Goal

The desired result or achievement toward which effort is directed.

Creative Tension

A state that arises when there is a gap between reality and vision, often leading to innovative thinking and problem-solving to bridge the gap.

"I Don't Care"

An expression indicating apathy or a lack of interest or concern about a particular matter or outcome.

Stagnation

A period of inactivity or lack of growth and development, either personally or in a broader economic context.