Externalities that occur in market transactions and affect parties beyond those involved in such transactions are known as _____

When a product is taxed,

A) part of the initial consumer surplus goes to the government as revenue. B) part of the initial consumer surplus becomes a deadweight loss. C) the producer surplus never changes because consumers pay taxes, not producers. D) Both answers A and B are correct. E) Both answers B and C are correct.

Which of the following shifts both short-run and long-run aggregate supply to the left?

a. a decrease in the actual rate of inflation b. a decrease in the expected rate of inflation c. a decrease in the capital stock d. a drought in the Midwest agricultural areas.