Increasing distortionary taxes to finance an additional unit of the public good further distorts the allocation of resources in the economy but increases economic efficiency.
A)True
B)False
C)Uncertain

Question

Quizplus · Accepted Answer

Increasing distortionary taxes typically leads to inefficiencies by distorting resource allocation, thus reducing economic efficiency rather than increasing it.

Increasing Distortionary Taxes to Finance an Additional Unit of the Public