If the Primary Goal in Implementing a Tax Is to Maximize

question 120

Multiple Choice

If the primary goal in implementing a tax is to maximize efficiency and minimize deadweight loss,the government should impose a(n) :

• A) income tax.
• B) lump sum tax.
• C) sin tax.
• D) proportional tax.

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Definitions:

Return For Security

The expected financial gain or loss from investing in a security, considering both dividends and capital appreciation.

WACC

The Weighted Average Cost of Capital represents a computation that determines a company's capital costs, with each type of capital being weighted according to its proportion.

Tax Adjustment

Modifications made to income or tax liability due to deductions, exemptions, and credits to comply with tax regulations or to benefit from them.

Interest Paid

The amount of money paid by a borrower to a lender in exchange for the use of borrowed money.