Economics 9708 · AS & A Level · Short-run costs

Short-run costs — practice question

What limits the use of income taxes for redistributing income to poorer groups in society?

  • Athe costs to employers of tax collection
  • Bthe fact that poorer groups have a higher marginal propensity to save
  • Cthe fact that richer and poorer groups have the same marginal propensity to consume
  • Dthe likelihood that, at some point, higher marginal taxes will reduce tax revenue

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