Raising taxes and increasing welfare payments
A)reduces market power.
B)proves that there is such a thing as a free lunch.
C)improves efficiency at the expense of equity.
D)None of these answers.
E)improves equity at the expense of efficiency.

Question

Quizplus · Accepted Answer

Raising taxes and increasing welfare payments improves equity as it helps to redistribute wealth and reduce income inequality. However, it may come at the expense of efficiency as it can reduce incentives for individuals to work and invest.

Raising Taxes and Increasing Welfare Payments