In Most Cases,taxes Reduce Economic Efficiency Because

question 62

Multiple Choice

In most cases,taxes reduce economic efficiency because

• A) they lower prices for consumers and cause firms to suffer.
• B) they increase firms' profits at the expense of consumers.
• C) taxes are perceived as unfair by some taxpayers.
• D) the government often spends tax revenues on programs that some voters don't like.
• E) they reduce consumer surplus and producer surplus.

---

Definitions:

Multiple Endorsements

Refers to the practice in banking and finance where a document, such as a check, is signed over to another party multiple times.

Liable

Being legally responsible for something, typically referring to obligations in law.

Primary Liability

The direct and immediate responsibility to fulfill an obligation or repay a debt, without necessarily having recourse against others for reimbursement.

Secondary Liability

Secondary Liability refers to the legal responsibility of a third-party for the actions of another, such as a parent company being liable for the actions of its subsidiary.