To fully understand how taxes affect economic well-being, we must
a. assume that economic well-being is not affected if all tax revenue is spent on goods and services for the people who are being taxed.
b. compare the taxes raised in the United States with those raised in other countries, especially France.
c. compare the reduced welfare of buyers and sellers to the amount of revenue the government raises.
d. take into account the fact that almost all taxes reduce the welfare of buyers, increase the welfare of sellers, and raise revenue for the government.
c
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A tradeoff is
A) represented by a point inside a PPF. B) represented by a point outside a PPF. C) a constraint that requires giving up one thing to get another. D) a transaction at a price either above or below the equilibrium price.
Examine the following statements and determine if they are normative or positive in nature. Explain your answer
a. The U.S. automotive industry registered its highest growth rate in 5 years in 2012; U.S. auto sales increased by 13% compared to 2011 . b. The U.S. government should increase carbon taxes to control emissions that cause global warming.