Tax imposition on goods leads to a proportionate rise in prices refers to which of the following concept :

Cascading Effect

The correct answer is option (4) : Cascading Effect

The term "cascading effect" in taxation refers to a situation where a tax on a good or service is applied at multiple stages of the production and distribution chain. As a result, the tax is levied not just on the final value of the product but also on the taxed amount at each previous stage. This leads to a cumulative or "cascading" effect, where the tax is compounded as it moves through the production and distribution process.

When taxes cascade, the overall tax burden on the final consumer becomes higher than what would be expected if the tax were only applied to the final sale. This can have implications for the prices of goods and services, as the cost of the tax at each stage is passed on to the next, ultimately contributing to a proportionate rise in prices. The concept of the cascading effect highlights the inefficiencies and distortions that can arise in a tax system where taxes are applied at multiple stages of production and distribution.