There is a possibility that a national sales tax will be implemented. Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than do high-income individuals. This argument is motivated by concerns over
A. efficiency.
B. economic growth.
C. economic stability.
D. equity.
Answer: D
Economics
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The more elastic the supply curve, the ____ will be the effect of a tax on the quantity exchanged and the ____ will be the welfare cost. a. greater; greater
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