When People Alter Behavior in Response to Taxes, Which of the Following

question 94

Multiple Choice

When people alter behavior in response to taxes, which of the following is not true?

• A)Excess burden is created.
• B)Inefficiency occurs.
• C)Tax shifting might occur.
• D)The excise tax rate can increase.

---

Definitions:

Shares

Units of ownership interest in a corporation or financial asset, providing a portion of the profits to shareholders in the form of dividends.

Annual Coupon

Annual Coupon refers to the yearly interest payment that bondholders receive from the bond's issue date until it matures.

Face Value

Face value refers to the nominal value or original cost of a security as stated by its issuer, crucial for calculating interest payments for bonds.

Dollar Return

The total profit or loss in dollar terms from an investment, including both capital gains and dividends or interest.