What Would NOT Result from Replacing the Income Tax with a Consumption

question 105

Multiple Choice

What would NOT result from replacing the income tax with a consumption tax?

• A) The interest rate would decrease.
• B) Investment would decrease.
• C) The standard of living would eventually rise.
• D) The supply of loanable funds would shift right.

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Definitions:

Financial Accountants

Professionals specializing in the preparation and analysis of financial statements and reports, ensuring compliance with accounting standards.

Costing System

The method or system used by a company to evaluate and manage the costs associated with its business activities and to price its products or services.

Accounting Information System

A system, typically computer-based, for managing financial data and processes, enabling the collection, storage, management, and reporting of financial transactions.

Financial Accounting

The branch of accounting that deals with summarizing, analyzing, and reporting business transactions to external entities, including investors and regulators.