The Primary Objective of a Tax Credit Is to Encourage

question 189

True/False

The primary objective of a tax credit is to encourage businesses to behave in certain ways. One example is offering a tax credit to automobile manufacturers for the purchase of robotics used in the manufacture of automobiles.

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Definitions:

Opportunity Cost

The value of the next-best alternative when a decision is made; it's what is foregone to undertake a certain action.

Capital

Financial assets or their financial value, including funds in deposit accounts, as well as the machinery, buildings, or equipment used in producing goods and services.

Nondiversifiable Risk

A type of risk that cannot be eliminated through diversification and affects all investments across the market.

Weighted Average

A mean where each value in the data set is multiplied by an assigned weight before the final calculation is performed.