Firms May React to a Payroll Tax by

question 35

Multiple Choice

Firms may react to a payroll tax by

• A) substituting labor for capital.
• B) reducing their output.
• C) shifting to less capital intensive techniques.
• D) hiring more labor.

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Definitions:

United Fruit Company

A U.S.-based corporation that was a major producer and marketer of fruit and other foods, primarily bananas, and had significant influence in Latin America.

Indochina

A region in Southeast Asia, comprising the countries of Vietnam, Laos, and Cambodia, notable for its colonial history under French rule and subsequent conflicts.

Palestine

Palestine traditionally refers to a region in the Eastern Mediterranean, historically significant and now comprising parts of modern Israel and the Palestinian territories.

Second-rate Power

A term used to describe a country or entity that lacks the dominant influence, military strength, or economic capacity of leading world powers.