As the Tax Wedge Associated with a Given Economic Activity

question 60

Multiple Choice

As the tax wedge associated with a given economic activity gets smaller,we would expect

• A)more of that economic activity to occur.
• B)the distortions caused by taxes on that activity to be greater.
• C)people to engage in less of that particular activity.
• D)no change in the practice of that activity until the tax wedge ultimately disappears.

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Definitions:

Intelligence Scores

Quantitative measures obtained through standardized testing designed to assess human cognitive abilities and potential.

Decreased

Refers to being reduced in size, quantity, degree, or intensity.

Torrance Test

A series of standardized tests designed to measure creative thinking ability in individuals.

Creative Thinking

The ability to think outside the box and generate new, original, and innovative ideas or solutions.