Asked by Catherine Renshaw on Jun 18, 2024
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The total burden of the tax is
A) the revenue collected from the tax minus the excess burden created by the tax.
B) the excess burden created by the tax minus the revenue collected from the tax.
C) the sum of the revenue collected by the tax and the excess burden created by the tax.
D) the ratio of the revenue collected and the excess burden created by the tax.
Excess Burden
The cost to society created by market inefficiency, particularly through taxation or other government policies, beyond the immediate financial effects.
Tax Revenue
The income that is gained by governments through taxation, which is used to fund public services and infrastructure.
Total Burden
The complete impact, often financial or economic, borne by an entity or system as a consequence of a particular action or policy.
- Acquire an understanding of the principle of excess burden and its effect on the efficiency of fiscal measures.
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Learning Objectives
- Acquire an understanding of the principle of excess burden and its effect on the efficiency of fiscal measures.
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