Question 1

Taxes are of interest to&#10;A)microeconomists because they consider how to balance equality and efficiency.&#10;B)microeconomists because they consider how best to design a tax system.&#10;C)macroeconomists because they consider how policymakers can use the tax system to stabilize economic activity.&#10;D)All of the above are correct.

Accepted Answer

Taxes are of interest to microeconomists as they consider the design of the tax system for balancing equality and efficiency. Similarly, macroeconomists consider the use of the tax system by policymakers to stabilize the economy. Hence, all the given options are correct.

Question 2

Taxes are costly to market participants because they&#10;A)transfer resources from market participants to the government.&#10;B)alter incentives.&#10;C)distort market outcomes.&#10;D)All of the above are correct.

Accepted Answer

Taxes transfer resources from market participants to the government, alter incentives, and distort market outcomes. Thus, all of the above options are correct.

Deck 8: 4: Sec 84 Mc Conclusion