How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?
a. one dollar
b. less than one dollar because the administration of and compliance with the tax laws creates jobs for people
c. more than a dollar because collection of the taxes requires resources that would otherwise be available for private sector production
d. more than a dollar because of the excess burden resulting from the elimination of productive exchanges by the taxes
e. Both c and d are correct.
E
You might also like to view...
Which of the following is true in a perfectly competitive market?
a. The sellers can partially influence the price level in the market. b. All firms have identical costs. c. Entry or exit of new sellers into the market is restricted. d. Buyers and sellers have incomplete information about the product and the market.
According to the simple quantity theory of money, an increase in the money supply will shift the __________ curve to the right and raise __________
A) AD; Real GDP B) AS; the price level C) AD; the price level D) AS; Real GDP E) none of the above