Examlex
Which of the following best defines functionalism
Neutral Taxes
Taxes that do not affect the allocation of resources between different goods or activities in the economy.
Excess Burdens
The economic inefficiencies or losses that result from imposing taxes or government policies.
Principle of Second Best
An economic theory that suggests when a condition for a perfect market cannot be met, the next-best solution may involve violating another condition to improve efficiency.
Distortionary Tax
A tax that causes people to alter their behavior and make different economic decisions than they would in a free market, potentially leading to inefficiency.
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