If neither the demand nor the supply for goods or labor is perfectly inelastic,then a sales tax on a good ________ a deadweight loss and an income tax ________ a deadweight loss.

Question

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A sales tax on a good creates a deadweight loss because it causes a decrease in the quantity of the good bought and sold, which leads to a loss in economic efficiency. An income tax creates a deadweight loss because it distorts individuals' decisions about work, saving, and investment, leading to less economic activity than there would be in the absence of the tax.

If Neither the Demand nor the Supply for Goods or Labor