In 1994, the state of California suffered a devastating earthquake. To help pay for the damages, the state raised its sales tax by one cent per dollar of expenditure on most consumer goods. This state sales tax is an example of what economists call:

A) an ad valorem tax.
B) a specific tax.
C) a neutral tax.
D) a negative tax.
E) none of the above

Sales Tax

A tax imposed by governments on the sale of goods and services, collected by the retailer at the point of sale.

Ad Valorem Tax

A tax based on the assessed value of an item, such as property or goods, typically expressed as a percentage.

California

A diverse and populous state located on the Pacific coast of the United States, known for its significant economic, cultural, and political influence.