When a country adopts a more efficient tax system,it is likely to
A) have no effect on the production function.
B) shift the production function upward.
C) shift the production function downward.
D) have no impact on technological innovation.
E) have no impact on physical capital.

Question

Quizplus · Accepted Answer

Adopting a more efficient tax system can lower the cost of doing business, increase incentives to work and invest, and reduce tax evasion. These factors can lead to an increase in productivity and output, which would shift the production function upward.

When a Country Adopts a More Efficient Tax System,it Is