Question

17.suppose the government taxes the rich to distribute money to the poor. which of the following is an example of an efficiency loss? a. rich people take home less of the money from their jobs because of the tax b. rich people don't work as hard because of the tax c. poor people are better off because of the redistribution d. both a and b e. none

Answer 1

D. Both option a and b represent efficiency losses in a situation where the government taxes the rich to distribute money to the poor.

Step-by-step explanation:

The efficiency loss in a situation where the government taxes the rich to distribute money to the poor can be observed in both option a and b. Option a, where rich people take home less money from their jobs due to the tax, represents an efficiency loss because it reduces the incentive for the rich to work and earn income. Option b, where rich people don't work as hard because of the tax, also leads to an efficiency loss as it decreases productivity and output in the economy.