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The Negative Effect of a Tax on the Economic Surplus

Question 141

Multiple Choice

The negative effect of a tax on the economic surplus of participants in a market should:


A) be enough to convince the government that the tax is a bad idea.
B) be weighed against the potential benefits of the public goods financed by the tax.
C) insure that the tax will never be approved by voters.
D) be ignored if the government needs to generate tax revenue.

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