What Is a Value-Added Tax (VAT)

question 92

Multiple Choice

What is a value-added tax (VAT) ?

• A) It is essentially a tax on profits earned by firms from the sale of goods and services.
• B) It is a tax placed on a product whenever value is added at a stage of production and at final sale.
• C) It is a tax imposed on those who supply factors of production, such as the payroll tax.
• D) It is a tax imposed on luxury goods to generate additional revenue for the government.

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Definitions:

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