When would a tax be efficient?

What will be an ideal response?


A tax is efficient, that is, creates no deadweight loss, when demand is perfectly inelastic or supply is perfectly inelastic. In both these cases a tax does not change the quantity produced and so creates no deadweight loss.

Economics

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A firm is holding excess labor. This will

A. decrease the productivity of capital. B. reduce labor productivity. C. increase the amount of capital employed. D. increase labor productivity.

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Suppose that the U.S. government gives foreign aid to Turkey. This transaction would directly

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Economics

________ in the domestic interest rate causes the demand for domestic assets to increase and the domestic currency to ________, everything else held constant

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Economics