Measurements of changes in welfare; economy-wide incidence of taxes; taxation, risk-taking, and investments; corporate taxation; effects of taxation on financial markets; taxation of goods and services; taxation of income; and tax arbitrage, avoidance, and evasion, also the underground economy. Applied capital theory for public-sector investment decisions; social opportunity cost of capital, labor, and foreign exchange.

CILO-1: Identify the role of government in the economy, including the principles of taxation, public goods, and externalities. CILO-2: Explain the impact of government policies on market outcomes, such as the effects of taxes and subsidies on consumer and producer behavior. CILO-3: Discuss the challenges of designing and implementing effective tax policies, including the trade-offs between equity and efficiency. CILO-4: Evaluate the impact of government transfer programs, such as welfare and social security, on income distribution and economic behavior.