Author Question: When the government runs a deficit, which of the following is true? A) G > T + TR B) T < G ... (Read 29 times)

penguins · **on:** Jun 29, 2018

When the government runs a deficit, which of the following is true?

A) G > T + TR B) T < G + TR C) T > TR - G D) G > TR - T

Question 2

Explain the principle of neutrality with respect to taxes.

What will be an ideal response?

Loise Hard · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

All else equal, taxes that are neutral with respect to economic decisions (that is, taxes that do not distort economic decisions) are generally preferable to taxes that distort economic decisions. Taxes that are not neutral impose excess burdens.