Asked by Latrika Smith on Mar 10, 2024
Verified
Criteria that economists use in selecting a tax system include:
A) the ability to pay.
B) employment status.
C) consumer debt.
D) the maximal deadweight loss.
Maximal Deadweight Loss
The largest possible efficiency loss in a market, occurring when the allocation of resources is not optimal, often due to factors like taxes, subsidies, or monopolies.
Ability To Pay
A principle suggesting that taxes should be levied on individuals or entities based on their capacity to pay, usually measured by income or wealth.
- Critically assess the principles behind tax design and its implications on equity and efficiency.
Verified Answer
GD
Georgie DietzMar 10, 2024
Final Answer :
A
Explanation :
The ability to pay principle is a widely recognized criterion for selecting a tax system, emphasizing that taxes should be levied according to an individual's or entity's capacity to bear them.
Learning Objectives
- Critically assess the principles behind tax design and its implications on equity and efficiency.
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