Lump sum taxes _____.
A)are difficult to model theoretically but easy to apply
B)have a small excess burden
C)have no welfare cost
D)require perfectly elastic demand curves

Name: Lump sum taxes _____. A)are difficult to model theoretically but easy to apply B)have a small excess burden C)have no welfare cost D)require perfectly elastic demand curves
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Question

Quizplus · Accepted Answer

Lump sum taxes have no welfare cost because they do not distort economic decisions, unlike taxes that change behavior by altering prices or incentives.

Lump Sum Taxes _____