Author Question: When a tax is imposed on a good for which both demand and supply are very elastic, a. sellers ... (Read 74 times)

fasfsadfdsfa · **on:** Jun 30, 2018

When a tax is imposed on a good for which both demand and supply are very elastic,
a. sellers effectively pay the majority of the tax.
b. buyers effectively pay the majority of the tax.
c. the tax burden is equally divided between buyers and sellers.
d. None of the above is correct; further information would be required to determine how the burden of the tax is distributed between buyers and sellers.

Question 2

When the supply of money is vertical, changes in money demand will not change the equilibrium quantity of money in existence.
a. True
b. False
Indicate whether the statement is true or false