Economics · Public Finance
Which statement correctly differentiates tax buoyancy from tax elasticity?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Buoyancy is only for non-tax revenue
- 2They are identical concepts
- 3Elasticity includes discretionary policy; buoyancy holds policy fixed
- 4Buoyancy includes discretionary changes; elasticity excludes them✓
Correct answer
Buoyancy includes discretionary changes; elasticity excludes them
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