If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is
A) split between buyers and sellers but not evenly.
B) paid fully by sellers.
C) paid fully by buyers.
D) split evenly between buyers and sellers.
E) perhaps split between buyers and sellers but it is impossible to determine the incidence without further information.
C
You might also like to view...
By fixing its exchange rate, China is most likely
A) achieving a low inflation rate by anchoring to the U.S. inflation rate. B) keeping its export prices low. C) making it easier to compete in world markets. D) Both B and C.
If the Federal Reserve sells bonds, the required reserve ratio is 0.25 and the money supply decreases by $10,000 . how did the Fed accomplish this change?
a. The Fed sold $10,000 in bonds. b. The Fed sold $7, 500 in bonds. c. The Fed sold $2,500 in bonds. d. The Fed sold $7,518 in bonds. e. The Fed sold $40,000 in bonds.