Which of the Following Concerning Implicit Taxes and Clienteles Is

question 31

Multiple Choice

Which of the following concerning implicit taxes and clienteles is not true?

• A)Market forces drive down the BTROR of tax-favored assets.
• B)The reduced return of tax-favored assets is an implicit tax.
• C)Investors whose tax rate exceeds that of the marginal investor can reap some benefit through the clientele effect.
• D)Marginal investors will always benefit from the implicit tax on tax-favored investments.

---

Definitions:

Capillaries

The smallest blood vessels in the body, responsible for the exchange of nutrients and waste materials between the blood and tissues.

Secretion

The mechanism whereby compounds are synthesized and expelled from a cell, gland, or organ, either to fulfill a specific task in the body or to be excreted.

Filtrate

The liquid that has passed through a filter, removing certain particles or substances.

ADH

Antidiuretic hormone, also known as vasopressin, a hormone produced by the hypothalamus and released by the posterior pituitary gland, which helps control the balance of water in the body.