Transfer Payments Made by the Government Affect Its Net Tax

question 70

Multiple Choice

Transfer payments made by the government affect its net tax revenues

• A)directly.
• B)indirectly through government purchases.
• C)indirectly through net exports.
• D)indirectly through the investment function.
• E)indirectly through the consumption function.

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Definitions:

Project Profitability Index

A financial metric used to analyze the potential return of an investment project considering its present value of cash inflows and initial investment.

Investment Required

Investment required refers to the total amount of capital needed to undertake a project, start a new business, or make a significant purchase.

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by initial investment.

Internal Rate Of Return

A discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.