Evaluate the Following Argument: "Small Businesses Generally Have to Pay

question 37

Essay

Evaluate the following argument: "Small businesses generally have to pay more for funds they borrow from banks than they would if they raised the funds in financial markets. This shows that small businesses must value the personal relationships they maintain with bank loan officers. Otherwise, they would be taking advantage of the cheaper funds available in financial markets."

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Definitions:

Proportional

Having a constant relation in degree or number between two or more variables.

Regressive

Describing taxes or policies that take a larger percentage from low-income earners than from high-income earners.

Progressive Structure

A tax system where the tax rate increases as the taxable base amount increases, often applied to income tax.

Income-tax System

A government system for assessing and collecting taxes on the income of individuals and businesses.