Which of the Following Statements Correctly Describes the Relationship Between

question 43

Multiple Choice

Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax?

• A)Both the size of the deadweight loss and tax revenue increase.
• B)The size of the deadweight loss increases,but the tax revenue decreases.
• C)The size of the deadweight loss increases,but the tax revenue first increases,then decreases.
• D)Both the size of the deadweight loss and tax revenue decrease.

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Definitions:

U.S. Dollar

The official currency of the United States, recognized worldwide as a standard of monetary value.

World Economy

The global network of economic activities and transactions, encompassing all the economies of the world's nations and influencing international trade and finance.

Church Committee

A U.S. Senate committee in the 1970s that investigated abuses by the CIA, NSA, FBI, and IRS, leading to reforms and greater oversight of intelligence agencies.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies, roughly from the end of World War II to the dissolution of the Soviet Union in 1991.