Answer to Question #74837 in Macroeconomics for Thulie

Question

72. Which of the following statements regarding taxes are correct?
a. A tax is neutral if it has minimum distortion effects on prices.
b. Tax avoidance occurs when people do not pay the taxes they are supposed to pay.
c. A gate fee at a private park is an example of user charges.

[1] a
[2] b
[3] c
[4] a and b
[5] All the statements are correct.

Answer 1

[1] a A tax is neutral if it has minimum distortion effects on prices.