A Deadweight Loss Results from the Imposition of a Tax

question 75

Multiple Choice

A deadweight loss results from the imposition of a tax on a good because the tax

• A) induces the government to increase its expenditures.
• B) reduces the quantity of exchanges between buyers and sellers.
• C) causes a disequilibrium in the market.
• D) imposes a loss on buyers that is greater than the loss to sellers.

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Nonfinancial Asset

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