When Policy Makers Are Deciding Where to Place the Statutory

question 86

Multiple Choice

When policy makers are deciding where to place the statutory incidence of a tax, it is helpful to remember that:

• A)this decision will have no effect on the economic incidence of the tax.
• B)the economic incidence will fall to the more elastic party.
• C)this decision will largely determine the economic incidence of the tax.
• D)this decision will have a large impact on the efficiency of the tax.

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Definitions:

U.S. Citizen

A person who has acquired citizenship status of the United States of America through birth or naturalization.

Ad Valorem Duty

A type of tax charged based on the value of the product or property, commonly used in customs duties.

Ad Valorem Duty

A type of tax applied on the value of an item, commonly used in the context of customs duties on imported goods.

Country A

A placeholder name often used to denote a hypothetical or undisclosed nation in discussions or examples.