A Tax and a Regulation That Have the Same Effect

question 42

Multiple Choice

A tax and a regulation that have the same effect on output in the short run will have different effects in the long run._____ creates profits which encourages _____,while _____ creates losses and encourages _____.

• A)Corrective taxation;entry;regulation;exit
• B)Regulation;entry;corrective taxation;exit
• C)Corrective taxation;exit;regulation;entry
• D)Regulation;exit;corrective taxation;entry

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Definitions:

Malpractice

Professional misconduct or failure to exercise adequate skill, leading to loss or injury to a patient or client.

State Corporate Laws

These are laws specific to a particular state within the United States that govern the formation, operation, and dissolution of corporations within that state.

Incorporate

The process of legally declaring a corporate entity to be separate from its owners, providing protections such as limited liability.

Tax

A financial charge or other levy imposed by a government on individuals or entities to fund government spending and various public expenditures.