An Optimal Tax Is One That Minimizes the

question 63

Multiple Choice

An optimal tax is one that minimizes the

• A)external benefit.
• B)total deadweight loss from the tax.
• C)income taxes.
• D)horizontal equity.

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Definitions:

Indenture

A legal document that describes all the details of a debt security to potential buyers.

Covenant

A legal agreement or contract specifying certain conditions or actions that must be met or complied with.

Prospectus

A regulatory filing that describes all the details of a debt or equity security to potential buyers.