Tax cuts and deregulation may cause output in an economy to increase by each of the following, except:
A)increasing the value of output by reducing deadweight tax burdens
B)luring the underground economy to the surface
C)increasing incentives to produce
D)reducing competition

Question

Quizplus · Accepted Answer

Tax cuts and deregulation tends to increase competition by allowing new firms to enter the market and reducing barriers to entry for existing firms. Therefore, reducing competition is not a likely outcome of tax cuts and deregulation.

Tax Cuts and Deregulation May Cause Output in an Economy