Suppose a new pollution tax of $0.01 per kilowatt-hour of electricity is imposed on coal-fired power producers by the federal government. Which of the following correctly describes how this tax will affect the market for electricity served by these power plants?

If the Fed follows a policy of fixed exchange rates, an undervalued dollar will force the Fed to

a. conduct open market purchases. b. raise the discount rate. c. raise the required reserve ratio. d. cut taxes or raise government spending.

How would the market for coffee be affected if the government charged an excise tax of $1.00 on each unit of coffee sold?

A) There would be a shortage of coffee. B) The demand for coffee would increase. C) The demand for coffee would decrease. D) The supply curve would shift up vertically by $1.00.