Which of the Following Statements Correctly Describes the Relationship Between

question 43

Multiple Choice

Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax?

• A)Both the size of the deadweight loss and tax revenue increase.
• B)The size of the deadweight loss increases,but the tax revenue decreases.
• C)The size of the deadweight loss increases,but the tax revenue first increases,then decreases.
• D)Both the size of the deadweight loss and tax revenue decrease.

---

Definitions:

Stop-payment Order

A request made to a bank by an account holder not to pay a check or transaction previously authorized.

Negligence

The failure to take reasonable care to prevent harm to others that a reasonably prudent person would have taken under the same circumstances.

Check 21 Act

A U.S. federal law that facilitates check truncation by creating a new type of negotiable instrument called a substitute check.

Electronically

Refers to processes, transactions, or communications that are conducted using electronic devices or over the internet.