The difference between the pretax and post-tax return to an economic activity is known as the
A) tax multiplier.
B) net tax.
C) tax burden.
D) tax wedge.

Question

Quizplus · Accepted Answer

The difference between the pretax and post-tax return to an economic activity is known as the tax wedge. It refers to the amount of tax paid by both the employer and employee on a particular activity or transaction. It affects the incentives of individuals and businesses to engage in economic activities, and can create distortions in the allocation of resources.

The Difference Between the Pretax and Post-Tax Return to an Economic