In practice
A)lump sum taxes affect the effective prices that consumers face in the market.
B)taxes are not lump sum taxes.
C)real wages affect the level of lump sum taxes.
D)the quantity of profits that the consumer received is dictated by lump sum taxes.
E)taxes have no distortionary effect.

Question

Quizplus · Accepted Answer

Lump sum taxes are fixed amounts not related to the economic behavior or income level of individuals, making them rare in practice. Most taxes are not lump sum because they vary based on income, purchases, or other factors, thus affecting behavior and economic decisions.

In Practice