When the Size of a Tax Is Doubled,what Happens to the Deadweight

question 160

Multiple Choice

When the size of a tax is doubled,what happens to the deadweight loss from the tax

• A)It increases by the size of the tax.
• B)It doubles.
• C)It remains constant.
• D)It increases by a factor of four.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

Balance Sheet

A document detailing a business's financial status at a given moment, listing the company's resources, debts, and owner's equity.

Adjusting Entries

Adjusting entries are journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Routine Entry

Regular, often daily, accounting entries that reflect standard business transactions.