Author Question: Consider that you are a government economist asked by a state legislature to apply excise taxes to a ... (Read 46 times)

TFauchery · **on:** Jul 1, 2018

Consider that you are a government economist asked by a state legislature to apply excise taxes to a variety of goods sold in your state. You know you want to minimize the excess burden of taxation so you apply the Ramsey Rule.

This means that you tell the legislature to _____. a. set the tax rates proportional to the elasticities of demand for each good b. set the tax rates in inverse proportion to the elasticities of demand for each good c. set the tax rates proportional to the elasticities of supply for each good
d. set the tax rates in inverse proportion to the elasticities of supply for each good

Question 2

The underlying principles behind the slashing of marginal tax rates in 1964 were Monetarist.

a. True b. False