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Why does an indirect tax raise a good's market price?
A
- It lowers producers' costs.
- Supply and quantity traded rise, while price falls.
B
Demand is price inelastic, so buyers reduce purchases only slightly.
C
Government spending on one market can spill into others when hired workers spend their wages elsewhere.
D
It raises producers' costs, reducing supply at every price and pushing the market price up.
Card 1 of 20
3.5.5 Analyse effects of taxes and spending Flashcards
20 flashcards on OCR GCSE Economics 3.5.5 Analyse effects of taxes and spending: the key terms, formulae and calculations you need to recall for Component 01 and Component 02.