Explain the concept of efficiency as it relates to taxation.
What will be an ideal response?
A tax is said to be efficient if it has used every available opportunity to make someone better off without making someone else worse off. Taxes are almost always inefficient, but some taxes are more inefficient than others.
You might also like to view...
In contrast to competitive firms, single-price monopolies
A) do not have to worry about market demand. B) sell only if demand is inelastic. C) can never incur a loss. D) can make an economic profit indefinitely. E) must take the price that is determined by the market demand and market supply.
The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of
A) its substitutes and its complements. B) its substitutes but not its complements. C) its complements but not its substitutes. D) neither its substitutes nor its complements.
An increase in the price of a complement shifts the demand curve to the
a. right b. left c. it does not change the demand curve d. none of the above
The ratio of money created by the lending activities of the banking system to the money created by the government's central bank is called the:
A. money multiplier. B. reserve ratio. C. federal funds. D. demand deposits.