An Increase in Lump-Sum Taxes Results in

question 165

Multiple Choice

An increase in lump-sum taxes results in

• A)both the intercept and the slope of the expenditure line increasing.
• B)the intercept of the expenditure line getting larger.
• C)the intercept of the expenditure line decreasing.
• D)the slope of the expenditure line decreasing.
• E)the slope of the expenditure line getting larger.

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, providing a measure that reflects the significance of each value.

Specific Costs

Costs that can be directly attributed to a particular project, department, or activity.

Required Return

The minimum return that keeps an investor in a particular stock. Generally a function of the risk perceived in the investment.

Target Capital Structure

The ideal mix of debt, equity, and other financing sources a company aims to maintain over time.