What Do Subsidies and Commodity Taxes Have in Common

question 2

Multiple Choice

What do subsidies and commodity taxes have in common?

• A) In both cases, who the policy mainly affects depends on who is assigned the tax or subsidy.
• B) Both policies create inefficient increases in trade.
• C) Both policies have a greater impact on the side of the market with the more inelastic curve.
• D) Both policies decrease deadweight loss.

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