Question

In recent years, a growing number of states have legalized marijuana for recreational purposes. Sales of marijuana are subject to various state sales and excise taxes that add between 25% and 44% to the price. Previously, sales of marijuana in these states took place in the informal or underground economy, where taxes are avoided and there is a high crime rate. Which of the following is NOT a fiscal policy justification for legalizing marijuana?

There will be an increase in the amount of potential marijuana users. There will be a reduction in drug enforcement costs. There will be a decrease among some underground drug activity. The government will experience an increase in revenues.

A balanced budget amendment to the Constitution requiring Congress to balance the budget every year is introduced in Congress every so often. If the budget is balanced, all these are problems that policymakers and the economy would face EXCEPT:
	the annually balanced budget would eliminate the automatic aspect of the federal budget. with a balanced budget amendment, government spending would have to be cut. a balanced budget would cause large increases in tax rates. a balanced budget forces fiscal discipline that decreases the chances of having an unsustainable debt.

Answer 1

1 - Option C

There will be decrease among the underground drug activity

This is because the black marketing of the marijuana may increase because of the legalisation of marijuana.

2 - Option C

A balanced budget would cause an increase in the tax rates