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If a Tax Was Instituted Such That Every Dollar Collected

Question 165

Multiple Choice

If a tax was instituted such that every dollar collected in taxes from high income households resulted in a distribution of $.80 to low income households


A) efficiency and equality of incomes would both decrease.
B) equality of incomes would increase but efficiency would decrease.
C) efficiency would increase but equality of incomes would decrease.
D) efficiency and equality of incomes would both increase.

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