An Excise Tax Causes a Loss in Efficiency Because Taxes

question 45

True/False

An excise tax causes a loss in efficiency because taxes distort incentives.

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Definitions:

Psychological Components

Elements or aspects of an individual’s mental processes and functions, encompassing attitudes, emotions, cognition, and behavioral patterns.

Cognitive

Related to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Physiological

Pertains to the functions and activities of living organisms and their parts, including all physical and chemical processes.

Penile Erection

The physiological process resulting in the increased blood flow to the penis, causing it to become rigid and elongated.