The Efficiency Loss of a Tax Is the Idea That

question 42

Multiple Choice

The efficiency loss of a tax is the idea that

• A) in addition to taking income from the citizenry, taxes also increase the rate of inflation.
• B) taxes cause a decline in output for which marginal benefit exceeds marginal cost.
• C) taxes diminish incentives to work.
• D) government spends dollars less efficiently than do households and businesses.

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Definitions:

Confirmation Bias

An inclination towards sourcing, understanding, valuing, and recollecting insights that reinforce one's standing beliefs or presumptions.

Older Workers

Individuals in the workforce who are typically beyond middle age, often defined as being aged 50 or older, bringing experience and skills to their roles.

Factory Foreman

Refers to a person who supervises workers in a factory, ensuring that work is done efficiently, safely, and up to quality standards.

Overconfidence

A cognitive bias characterized by an individual's overestimation of their knowledge, ability, or control over situations.