If a Tax System Is Poorly Designed,it May Be Possible

question 41

Multiple Choice

If a tax system is poorly designed,it may be possible to increase:

• A)efficiency without sacrificing equity.
• B)equity while causing inefficiency.
• C)efficiency by sacrificing equity.
• D)equity without causing inefficiency or increase efficiency without sacrificing equity.

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Definitions:

Twin Deficits

The situation occurring when a country has both a current account deficit and a fiscal deficit, indicating excessive spending.

Trade Deficit

A situation where a country imports more goods and services than it exports, resulting in a negative balance of trade.

Gold Standard

An economic arrangement where paper money in a country directly mirrors the value of gold.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations and leading to significant geopolitical changes.