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4 Cards in this Set
- Front
- Back
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Indirect tax |
Tax on goods/services that have negative externalities |
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Subsidy |
Government grant to encourage production of a certain product |
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4 disadvantages of indirect taxes |
-size of the tax -PED (inelastic) -decreased competitiveness Regressive |
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4 disadvantages of subsidies |
-size -PED (inelastic=no increase in quantity) -how is the subsidy used? -opportunity cost |
