Asked by Latrika Smith on Mar 10, 2024



Criteria that economists use in selecting a tax system include:

A) the ability to pay.
B) employment status.
C) consumer debt.
D) the maximal deadweight loss.

Maximal Deadweight Loss

The largest possible efficiency loss in a market, occurring when the allocation of resources is not optimal, often due to factors like taxes, subsidies, or monopolies.

Ability To Pay

A principle suggesting that taxes should be levied on individuals or entities based on their capacity to pay, usually measured by income or wealth.

  • Critically assess the principles behind tax design and its implications on equity and efficiency.

Verified Answer

Georgie Dietz

Mar 10, 2024

Final Answer :
Explanation :
The ability to pay principle is a widely recognized criterion for selecting a tax system, emphasizing that taxes should be levied according to an individual's or entity's capacity to bear them.