QQuestionMathematics
QuestionMathematics
Raising taxes and increasing welfare payments $\qquad$ .
a. improves equality at the expense of efficiency
b. improves efficiency at the expense of equality
c. does none of the answer choices
d. proves that there is such a thing as a free lunch
e. reduces market power
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Answer
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Step 1: Identify the effects of raising taxes and increasing welfare payments.
When a government raises taxes, it typically collects more revenue, which can be used to fund various programs, such as increasing welfare payments. This action has two primary effects: it can reduce income inequality (improve equality) and potentially decrease economic efficiency.
Step 2: Understand the concept of equality and efficiency in this context.
Equality, in this context, refers to the distribution of income or resources among individuals or groups in society. A more equal society is one where the income or resources are distributed more evenly. Efficiency, on the other hand, refers to how well resources are allocated in an economy to achieve desired outcomes with minimal waste. A more efficient economy is one where resources are allocated optimally to generate the greatest benefit for all participants.
Final Answer
a. improves equality at the expense of efficiency
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