The Taxing Agency in Your State Would Like to Impose

question 28

Multiple Choice

The taxing agency in your state would like to impose a sales tax in a way that minimizes deadweight loss. To achieve this goal it should tax:

• A)goods that are relatively inexpensive.
• B)all goods equally.
• C)goods whose supply and demand curves are relatively inelastic.
• D)goods but not services.

---

Definitions:

Pressing Problem

A Pressing Problem refers to an urgent and important issue that requires immediate attention and resolution.

War Debt

War debt refers to the money borrowed by countries to finance their military operations and expenditures during times of war, often leading to long-term financial burdens.

Seven Years' War

A global conflict fought between 1756 and 1763, involving most of the great powers of the time and affecting Europe, North America, Central America, the West African coast, India, and the Philippines.

William Pitt

Refers to either William Pitt the Elder, a British statesman of the 18th century who was Prime Minister during the Seven Years' War, or William Pitt the Younger, his son, who also served as Prime Minister and is known for his administrative reforms and handling of the Napoleonic Wars.