Identify Which of the Following Statements Is True

question 22

Multiple Choice

Identify which of the following statements is true.

• A) All corporations are exempt from the accumulated earnings tax on their first $250,000 of accumulated earnings.
• B) A health service corporation can claim an accumulated earnings credit of $250,000.
• C) Payment of deficiency dividends will prevent the imposition of the accumulated earnings tax.
• D) All of the above are false.

---

Definitions:

President

The head of state and/or head of government in a republic, typically elected to be the chief executive officer and hold the highest office in the land.

Multiplier

An economic factor that quantifies the additional economic activity generated from an initial injection of spending.

Equilibrium Real GDP

is the level of Gross Domestic Product where aggregate demand equals aggregate supply, resulting in a stable economy without inflationary or recessionary gaps.

Investment

The act of allocating resources, usually financial, with the expectation of generating an income or profit, such as purchasing stocks, bonds, or real estate.