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An Excise Tax Causes Inefficiency If the Number of Transactions

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Multiple Choice

An excise tax causes inefficiency if the number of transactions in a market is reduced as a result of the tax.Because the tax discourages mutually beneficial transactions,there is a(n) _____ from a tax.


Definitions:

Events of Default

Specific conditions or circumstances outlined in a loan agreement or bond indenture that, when occurring, grant the lender the right to demand early repayment or take other corrective actions.

Cross Default

A provision in a loan agreement that triggers a default under the agreement if the borrower defaults on another debt obligation.

Compliance Default

Compliance default occurs when a party fails to act in accordance with set guidelines, rules, or laws, potentially leading to legal consequences.

Stock Options

Options granted by a company to its employees as a form of incentive compensation allowing them to buy shares at a specific price for a certain period.

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