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One of the Problems Associated with Government's Use of Taxes

Question 72

Multiple Choice
One of the problems associated with government's use of taxes and subsidies to address externalities is

One of the problems associated with government's use of taxes and subsidies to address externalities is


A) that higher tax rates discourage adverse selection.
B) that subsidies create moral hazards.
C) determining the socially optimal level of output.
D) that logrolling interferes with a natural market solution.
E) that the government must facilitate free riders.

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