The _______ effect tells us that when the government raises taxes, it receives more revenue per unit sold.

Question

Quizplus · Accepted Answer

The correct answer is the "price" effect. This effect explains that when the government imposes or increases taxes on goods or services, the price of those goods or services effectively increases. As a result, the government collects more revenue per unit sold due to the higher price, assuming demand remains relatively stable.

The _______ Effect Tells Us That When the Government Raises