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What Do Subsidies and Commodity Taxes Have in Common

Question 2

Multiple Choice

What do subsidies and commodity taxes have in common?


A) In both cases, who the policy mainly affects depends on who is assigned the tax or subsidy.
B) Both policies create inefficient increases in trade.
C) Both policies have a greater impact on the side of the market with the more inelastic curve.
D) Both policies decrease deadweight loss.

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