Suppose the government decides to raise the gasoline tax as a way to reduce air pollution and traffic congestion to their optimal levels. which of the following describes why corrective taxes, such as the gasoline tax, are unlike most other taxes?
o other taxes are typically used to cover general spending, but funds from corrective taxes can be used only to alleviate pollution.
o corrective taxes alter incentives, whereas other taxes typically do not.
o corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency.
o other taxes get passed on from businesses to consumers, whereas corrective taxes do not.

Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency.

Explanation:

A corrective tax is a tax imposed by the government to correct negative externalities. They are different from regular taxes, in the way that they instead of creating an inefficient allocation of resources they bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency.  

These taxes increase the cost of producing the goods that are creating negative externalities thus reducing its production. Unlike other taxes, corrective taxes do not create dead weight loss but reduce it.  

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