A Tax on Productive Activity Tends to

question 2

Multiple Choice

A tax on productive activity tends to

• A)increase formal market activity because it decreases prices
• B)decrease formal market activity because it increases work incentives
• C)decrease formal market activity because it lowers the return on such activity
• D)decrease activity in the underground economy because people are afraid of being connected with tax fraud
• E)increase activity in the underground economy because people are afraid of being connected with tax fraud

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Definitions:

Industrial Accidents

Unplanned events that occur in the workplace resulting in injury, death, or property damage.

Negative Effects

Unwanted, adverse outcomes or impacts that result from an action, event, or condition.

Absenteeism

The frequent absence from work or another duty without good reason.

Quid Pro Quo

A Latin phrase meaning "something for something," which refers to a mutually beneficial exchange or transaction.