If a Tax System Has No Deductions,exemptions,or Other Loopholes,then the Effective

question 140

Multiple Choice

If a tax system has no deductions,exemptions,or other loopholes,then the effective tax rate will be

• A)Greater than the nominal tax rate.
• B)Equal to the nominal tax rate.
• C)Less than the nominal tax rate.
• D)Equal to the vertical tax rate.

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Definitions:

Demand Heterogeneity

Describes the variation in consumers' preferences and needs, which can influence the market strategy of businesses.

Government Failure

Occurs when government intervention in the economy causes inefficiencies or leads to an allocation of resources that does not maximize societal welfare.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Externality

A consequence of an economic activity experienced by unrelated third parties; can be either positive or negative.