As the tax wedge associated with a given economic activity gets smaller, we would expect A)...

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Question

As the tax wedge associated with a given economic activity gets smaller, we would expect A)...

As the tax wedge associated with a given economic activity gets smaller, we would expect

A)	the distortions caused by taxes on that activity to be greater.

B)	people will spend more on that economic activity.

C)	no change in the practice of that activity until the tax wedge ultimately disappears.

D)	more of that economic activity to occur.

E)	people to engage in less of that particular activity.

business economics

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Answer 1

Answer #1

Option D

Explanation: This will lower the distortion of the market and the economic activity would rise.

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Answer 2

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