Which of the Following Is an Advantage of a Value

question 25

Multiple Choice

Which of the following is an advantage of a value added tax (VAT) compared to a final tax on retail sales?

• A) The VAT may lead to higher revenue collected because even if no sales takes place, the government collects tax revenue at earlier stages of production.
• B) The VAT is a more equitable tax system because the tax burden is shared by every participant in the production process and by the final consumer.
• C) The VAT encourages productive behavior because each producer bears a smaller portion of the total tax imposed on a product.
• D) The VAT reduces a nation's trade deficit.

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Definitions:

Osage

A Native American tribe originally located in the Ohio Valley and later known for their vibrant culture and significant historical impact in the Missouri and Oklahoma regions.

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A feature or device designed to limit the maximum current that can flow in an electric circuit, protecting the circuit from damage caused by overcurrent.