For the Purpose of Analyzing the Gains and Losses from a Tax

question 171

Multiple Choice

For the purpose of analyzing the gains and losses from a tax on a good,we use tax revenue as a direct measure of

• A)government's benefit from the tax.
• B)government's loss from the tax.
• C)the deadweight loss of the tax.
• D)the overall net gain to society of the tax.

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Definitions:

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Net Capital Outflows

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners, indicating the flow of capital from a country.

Trade Deficit

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

Foreign Assets

Investments or properties owned by individuals, companies, or governments in countries other than their own.