There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?
A) The elasticity of demand for the item that is taxed.
B) whether the tax is based on the ability-to-pay principle or the benefits-received principle
C) whether the tax is imposed by the federal government or a state government
D) The motive for the tax. If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.
A
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Refer to the scenario above. Which of the following statements will hold true if the starting bid is $300?
A) Everyone except Bob will take part in the auction. B) Everyone will take part in the auction. C) Only Bob will take part in the auction. D) Everyone except Joe will take part in the auction.
When the coupon rate on newly issued bonds ________ relative to older, outstanding bonds, the market price of the older bond ________
A) increases; rises in the secondary market B) increases; falls in the secondary market C) decreases; falls in the primary market D) decreases; falls in the secondary market
It is possible that class discrimination has become a stronger force in American society than racial discrimination
Indicate whether the statement is true or false
What do most economists believe about international trade?
a. It benefits all participants with no one harmed in the country. b. It benefits only big corporation but harms everyone else in a country. c. It benefits the majority of people but some people are harmed. d. It benefits no one and harms many people in the economy.