The demand curve for labor shows how many hours workers demand to work

Suppose the government imposes an 8 percent sales tax on clothing items and the tax is levied on sellers. Who pays for the tax in this situation? (Assume that the demand curve is downward sloping and that the supply curve is upward sloping.)

A) The sellers will pass on the entire sales tax to consumers and therefore the consumers bear the tax. B) The tax will be borne partly by consumers and partly by sellers. C) It is not possible to answer the question without information on price elasticities. D) The tax is borne entirely by the sellers.

Which of the following will be true when the foreign exchange market is in equilibrium and exports exceed imports?

a. The nation is experiencing a trade deficit. b. There will be a net inflow of capital. c. There will be a net outflow of capital. d. The exchange rate value of the domestic currency must rise.