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Allison Biese
on Dec 11, 2024

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Taxes adversely affect the allocation of resources because

A) they do not always fall more heavily on the rich than on the poor.
B) the taxes collected are not enough to finance government spending.
C) not everyone pays taxes.
D) they distort prices and thus distort the decisions of households and firms.

Allocation of Resources

The process of distributing available resources among various uses to satisfy the needs and wants of the society.

Taxes

Financial charges imposed by a government on individuals, businesses, or other entities to fund public spending and various services.

Prices

The monetary value assigned to goods and services in a market, determining the exchange rate in transactions.

  • Comprehend how taxes affect economic decisions and the allocation of resources.
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Sarah SorberDec 15, 2024
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