To Achieve Faster Growth, One Possibility Is to Tax

question 104

Multiple Choice

To achieve faster growth, one possibility is to tax

• A) consumption.
• B) saving.
• C) hiring.
• D) immigration.

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Definitions:

Constant Returns to Scale

A situation in which increasing the amount of inputs results in a proportional increase in outputs.

Diseconomies of Scale

A situation in which production costs increase as a firm’s output increases, leading to decreased efficiency.

Decreasing Returns to Scale

Decreasing Returns to Scale occurs when a firm increases all inputs by a certain proportion, but the output increases by a smaller proportion, indicating reduced efficiency.

Average Costs

The total cost of production divided by the number of units produced, often used to assess efficiency and profitability.