Which of the Following Statements Is True

question 140

Multiple Choice

Which of the following statements is true?

• A)Redistribution of income through taxation results in greater income for everyone.
• B)There is no tradeoff between efficiency and equity.
• C)If taxes are so high that people work a lot less, the redistribution of income could make everyone worse off.
• D)The pursuit of greater equity through taxation and redistribution may promote efficiency by making everyone happier.
• E)Only the rich are negatively affected by very high tax rates.

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Definitions:

Units of Output

The quantity or number of items produced by a company, individual, or production process.

Fixed Cost

Costs that do not vary with the volume of output produced, such as rent, salaries, or loan payments.

Mortgage Payments

Regular payments made to repay a loan taken out to purchase property, typically consisting of both principal and interest components.

Utility Costs

Utility costs are expenses for basic services such as electricity, gas, water, and telecommunications required for operating a business or maintaining a home.